Pre-tax profits increase eight-fold to €18m at Tipperary mining company

A COMPANY involved in the sale of lead and zinc from the Lisheen mine in Co Tipperary recorded an eight-fold increase in pre-tax profits to $22.9 million (€17.9m) last year.

Accounts just filed by Lisheen Milling Ltd show the company recorded the 721% increase in pre-tax profits after the firm increased turnover by 6% from $196m to $208m to the end of December last.

Earlier this year, Indian company Vedanta Resources purchased the Tipperary mine, along with other bigger mines in South Africa and Namibia, from previous owners Anglo American Zinc as part of a €1.34bn deal, which estimated Lisheen’s value at $308m (€242m).

In their report, the directors of Lisheen Milling Ltd said initiatives in the mine and mill last year “resulted in a record production year, with the mill exceeding demonstrated production”.

According to the directors report “as expected, the market environment was challenging, particularly in the first half of 2009.

However zinc production increased by 2.7% due to higher grades and tonnage mined, while lead output increased by 20.75% due to higher grades, improved recoveries and tones mined.

The directors state that zinc and lead metal prices recovered steadily throughout the year, on the back of sustained demand from China. The filings show the chief factor behind the eight-fold increase in pre-tax profits was the absence of any impairment charges last year.

The accounts show the company’s profits were hit by an impairment charge of $21.7m in 2008 that reduced profits to $2.7m that year. The company increased its operating profits by 62% from $17.6m to $28.6m last year. However, operating profits were hit last year by a redundancy provision of $5.9m.

The company paid a dividend of $170m in 2008, but no dividend was paid last year. The company’s accumulated profits at the end of December last stood at $49.3m.

Sales to Asia increased more than six fold to $63m last year, while sales in the company’s largest market, Europe dropped from $159m to $126m.

The numbers employed by the company last year reduced by four to 76 with staff costs reducing marginally to $7.8m.


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