Tirupati Graphite PLC (LSE: TGR, OTCQX: TGRHF) said its primary flake graphite operations at the Sahamamy and Vatomina projects in Madagascar have continued despite unusually challenging weather, including six cyclones in the past six months, as it posted record quarterly shipments and sales in the fourth quarter.
The company’s total flake graphite production for the year to March 2022 rose to 2,996 metric tons, from 1,718 tons the previous year, and sales grew 43% to 2,662 tons.
While in the fourth quarter to March 2022, the company recorded its highest quarterly shipment and sales of 1,137 tonnes at a record average price of US $ 866 per tonne.
London-listed Tirupati had targeted an increase in annual capacity from its two operations to 30,000 tonnes by the middle of this year from the current 12,000 tonnes.
Tirupati started commercial production from Vatomina, which has the capacity to produce 9,000 tons per annum (tpa) of flake graphite, last December after commissioning the project in September 2021.
Construction of the Sahamamy 18,000 tpa plant has continued but completion has been delayed by three months due to the weather, it said today. Commissioning is now scheduled to start at the end of September 2022.
Commissioning of the 100kilowatt hydropower plant at Sahamamy is on schedule with first power generation expected next month.
“Primary flake production and expansion of our production facilities has been impacted by the sustained period of unusually bad weather in Madagascar over the past six months; however, we continue to make excellent progress and increase our production capacity to the targeted 84,000 tpa level from our Madagascan projects, ”said Shishir Poddar.
“The next six months will be crucial for us as we strengthen our foundations, increase our capacity to 30,000 tpa and position the company to achieve better capacity utilization which will mitigate future headwinds.”
Along with most of the sector, Tirupati said it has experienced cost inflation, particularly for shipping and logistics, while higher prices for steel and petroleum products and overall inflation have increased its operating costs.
It said it was mitigating these increased costs by shifting sales to Free-On-Board (FOB) and has also been able to pass on incremental costs to its buyers by raising its prices.
“With Vatomina stabilizing, and the additional capacity of 18,000 tpa coming on stream later this year, we are focused on delivering a positive bottom line starting the current financial year,” Poddar said.
The shares were down 19% at 35p in early morning trading.