News Column

Sunkar Resources Pretax Loss Narrows On Revenue Jump

June 27, 2014

Tom McIvor

LONDON (Alliance News) - Sunkar Resources PLC Friday said its pretax loss narrowed in 2013 as new earth moving contracts and higher sales from direct application rock and ground phosphate rock drove up the company's revenues.

Sunkar, which is aiming to be a phosphate fertiliser manufacturer, said its pretax loss narrowed to USD4.2 million from USD9.2 million the previous year as revenues rocketed to USD15.0 million from USD2.2 million.

The company said its revenues increased as it received higher revenues from its phosphate sales to the Kazakh agricultural sector and industrial customers in Russia, while the completion of two major earth moving contracts brought USD13.5 million in revenues.

However, the company did note an increase in its cost of sales and foreign exchange losses during the period, reducing its profits.

Sunkar said it continues to pursue phosphate rock sales to farmers in Russia and Kazakhstan, while it continues to look at new earth moving contracts to make use of equipment which was left idle when the company reduced mining commitments at its Chilisai site in Kazakhstan.

Earlier in June, the company recommended a cash offer by majority shareholder Sun Avenue Partners Corp to buy up the shares its doesn't own in a deal valuing the company at GBP6.3 million, a move that will stave off Sunkar's likely insolvency.

"This offer provides a certain cash exit and secures the future of the company, against the current backdrop of Sunkar's particularly challenging financial position. Without the financial support received from SAPC, Sunkar would, in all probability, have had to enter into insolvency proceedings so, in the view of the Sunkar Board, the offer represents the best outcome for Sunkar Shareholders and employees alike," Chairman Teck Soon Kong said in a joint statement at the time.

Sun Avenue will offer 1.835 pence per share to Sunkar shareholders.

In addition to its 51.15% stake in the company, representing 174.5 million shares, Sun Avenue holds 1.28 million loan notes that can b4e converted into 34.1 million Sunkar shares, so long as the Ministry of Industry and New Technologies of the Republic of Kazakhstan waives its rights to acquire the Sunkar shares arising on conversion.

Sunkar shares were down 2.5% to 1.76 pence on Friday.

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Source: Alliance News

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