eBusiness Weekly
Enacy Mapakame
HARARE – Zimbabwe Stock Exchange-listed coal miner, Hwange Colliery Company Limited’s (HCCL) restructuring is paying off after the group’s half year production jumped by 45 percent to 819 857 tonnes from 565 298 tonnes in the same period last year.
But capital constraints restricted growth after production fell 22 percent below the budgeted target for the period of 1 million tonnes.
HCCL’s open cast operations contributed 296 958 tonnes or 36 percent of total production during the period under review.
Hwange is targeting optimal production volumes of 300 000 per month as it enhances capacity of its open cast and underground mining.
The increased production volumes in the period under review helped Hwange reclaim its market share, while improvements in earnings were also recorded. Revenue for the period under review came in 62 percent above that for comparable prior year period at $30,5 million.
This was driven by a 51 percent increase in sales volumes as well as increased prime grades in sales mix. Total sales tonnage rose 51 percent to 862 152 tonnes but below the budgetary target of 1,2 million tonnes.
Thermal coal contributed the largest portion of sales while industrial coal sales to industrial customers and tobacco sector also increased.
Sales to Hwange Power Station increased 70 percent to 376 695 tonnes from 221 646 tonnes.
The company has indicated coking coal sales will be a major area of focus and growth as the production from three main underground increases.
Export sales contributed 5 percent of compared to the target of 20 percent contribution. The company’s largest export market is Zambia.
The coal miner managed to narrow its loss for the period by 6 percent to $23 million from $24,5 million recorded in the prior year comparable period.
Total assets decreased 15,9 percent to $181 million from $216 million.
Acting chairman Juliana Muskwe said the company will focus on increasing production, open cast mining, resuscitation of underground mine operations and cost reduction among other strategies to turnaround the company and bring it back to profitability.
Resuscitation of the underground mine operations also remain key for the company. Hwange managed to bring back this operation producing an average 15 000 tonnes a month since January.
“The target is to bring the operation to 50 000 tonnes per month, which will contribute significantly to the company’s bottomline,” she said.
In view of the loss position, Hwange did not declare a dividend.
