SFP Metals sees fierce contest in cobalt as profits rise

Source: Metal Bulletin, 10 October 2011
Cobalt trading company SFP Metals' profit for the year to December 31, 2010 soared to $6.8 million on renewed market confidence. 

“As the world’s economies sought to regain stability after the shocks of 2008/09, the metal industry found new confidence, and the company was able to exercise a more ambitious strategy than the previous year,” SFP said, in its results statement. 

“Consumers were again prepared to make longer term commitments, and the performance and credit risks, while carefully monitored in all cases, receded,” the company added. 

Net profits increased 184%, up from $2.4 million in 2009, while revenue rose 89% to $144.7 million, and profit before tax hit $9.4 million in 2010, from $3.4 million in 2009. 

Shareholders’ funds also improved, increasing 128%, to $12.1 million for the year, although a dividend was not recommended. 

“The company’s turnover for 2010, nearly double that of 2009, reflected improved conditions. The company is pleased to report expansion of business, while carefully controlled, produced an extremely satisfactory result for the year,” SFP said. 

SFP was circumspect about the outlook for 2011 and beyond, as it anticipates new challenges for its business model as the contest for units intensifies.
 
“[There is also] the plethora of new cobalt production projects, and the increasing polarisation of the business in fewer hands will mean fierce competition for all opportunities,” the company said. 

“The London Metal Exchange’s impact on the cobalt market, while currently still minimal, will require continuing re-appraisal,” it added. 

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