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Debmarine Namibia's revenue up 11% to N$8.9 billion

2019-02-25  Edgar Brandt

Debmarine Namibia's revenue up 11% to N$8.9 billion

WINDHOEK – Debmarine Namibia’s 2018 revenue increased 11 percent to N$8.9 billion, driven by increased production, improved consumer demand, competitive pricing as well as the weakening of the Namibia dollar against the US dollar. The latest figures of the 50-50 joint venture between De Beers and the Namibian government were announced on Friday morning during an event attended by the Minister of Mines and Energy, Tom Alweendo, Debmarine’s executive management and key industry stakeholders. 

At the breakfast event, Debmarine Namibia’s Chief Financial Officer, Willy Mertens, also revealed that underlying EBITDA (Earnings before interest, tax, depreciation and amortisation) increased by six percent to N$4.6 billion. “The EBITDA increase is slightly lower due to cost pressures led by fuel prices and increased maintenance, but still maintaining a healthy 52 percent EBITDA margin,” Mertens explained. Royalties at 10 percent of sales and income tax at 55 percent reduced slightly to N$2.4 billion, following the EBITDA results.

“Return on assets on an EBITDA level remains healthy at 62 percent with gearing levels reducing to 30 percent as we repay existing debt – the SS Nujoma financed by Standard Bank Namibia and RMB Namibia,” said Mertens. 
Debmarine Namibia’s Chief Execuitive Officer, Otto Shikongo, emphasised that the marine diamond mining company is entering a period of significant capital investment, which is evidenced by the increase in capital expenditure and lower dividend payments.

Debmarine’s net debt reduced 113 percent to net cash position as it retained some additional cash to prepare for the upcoming investments.

Shikongo was also beaming with pride to state that during 2018, N$10.3 billion in value was generated and distributed. This includes but is not limited to N$3.6 billion to suppliers of goods and services, N$853 million to employees, N$2.4 billion to government for Income tax and royalties, N$388 million to providers of debt funding. 

Debmarine Namibia directly contributed N$16.4 billion over the past five years (2014-2018) to the fiscus.
Keynote speaker at the event, Alweendo noted that mining remains one of the most important sectors of the Namibian economy. In 2017, the mining sector contributed over 12 percent to GDP, and it is expected that by 2022, the mining sector’s share of the GDP will exceed 15.2 percent. 

“This high contribution to our economy suggests that for the foreseeable future, the economy will be dominated by the mining sector. Given the impact the mining sector has on the economy, it goes without saying that we need to take good care of the sector. We need to be pragmatic in the management of the sector. We need to ensure that the mineral resources are utilised to the benefit of both the investors and the state,” said Alweendo. 

He added that because of the importance of the mining sector, it is no surprise that the Namibians, who are the real owners of the resources, have a heightened interest in the mining sector and want to know how the mineral resources are being exploited and utilised. And, said Alweendo, Namibians have a legitimate expectation that the mineral resources be shared equitably.  

Alweendo also questioned whether the mining sector can do more for the economy, such as being leveraged to strengthen the productive capacity of the economy as a whole and being fully processed locally. 

“My general answer to these questions is that – yes indeed, all the above issues can be achieved. Yes, indeed the mining sector can do more. There is no reason why we should continue to export all our minerals in raw forms – some can easily be value-added. What is needed is a comprehensive dialogue between all the relevant parties that takes place in an environment of mutual trust. A dialogue that seeks to discover what is in the best interest of both parties,” Alweendo continued. 

“Value addition will strengthen the productive capacity of the economy, thereby serving as a catalyst for more investment in the economy. I am happy to note that such a dialogue between the mining industry and the Ministry of Mines and Energy has been intensified and I am hopeful that soon we will come to a mutually agreed outcome,” he concluded. 

2019-02-25  Edgar Brandt

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