Metmar narrows losses, says China office to improve market visibility
JSE-listed commodities trader Metmar reported a 5% rise in traded volumes and a 38% growth in revenues for the year to the end of February, which enabled it to reduce its headline loss for the period to R47-million, from R80.6-million in the previous year.
Earnings before interest, tax, depreciation and amortisation swung to R40.4-million during the period, from a negative R34-million in 2013.
The group attributed the improvement to a better product mix, new product lines, increased volumes, weaker exchange rate and cost controls.
“Challenging trading conditions caused by low commodity prices, reduced demand and low global economic growth persisted. These adversities were mitigated by product diversification, focused trading strategy, a weakening exchange rate, and supportive trade finance facility providers,” the company said in a statement.
It indicated that its recently opened office in China should offer it a deeper understanding of the commodities market in Asia and improve turnaround times of cash collection.
During the period, revenue from continuing operations increased 38% from R1.52-billion in the prior year to R2.1-billion.
Metmar’s trading margins narrowed to 4.7% on the back of increased transport costs, storage costs, contract finance interest and bank facility charges.
Metmar said it had managed its operating expenses well and had implemented various cost containment measures, including the closure of a number of unprofitable operations and a decrease in unrealised exchange losses, to lower expenses during the period to R126.2-million from the R162.9-million.
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