HWANGE Colliery Company said it was engaging with creditors to convert its short term debt into medium or long term debt following liquidity problems last year.
The group said part of its problems emanated from the fact some financial institutions and creditors were unwilling to extend its credit lines. The company is however positive about the year ahead.
Hwange mines, explores, processes and markets coal, coke and associated by-products. Chairman Winston Chitando said with an expected increase in production from both open pit and underground mining in line with the five year strategic and turnaround plan, a break-even result is forecast in 2017 and profitability will be achieved in 2018, increasing year by year to 2021.
“While the financial statements reflect a negative equity position, a cocktail of short, medium and long term measures have been implemented already and some are still work in progress,” said Chitando.
He said the five year plan included coal production from the new mining concessions at Western Areas and Lubimbi West. Chitando said it also took into account Hwange Power Station Stage 3 Expansion, the refurbishment of the small thermal power stations at Bulawayo, Munyati and Harare and the commissioning of new Independent Power Producer thermal power plants.
“Central to the increase in profitability is initially the resuscitation of underground mine, replacement or rebuild of its coke oven battery which will also supply coke oven gas as fuel substitute for diesel to Zimbabwe Power Company’s (ZPC) Hwange Power Station as well as supply of tar and benzole products to its subsidiary Zimchem,” he said.
In the results for the year to end December, the group reported a 41 percent decrease in revenue to $39.9 million (R536.86 million), down from $67.5 million in 2015. The company said this was mainly due to a decrease in sales volumes.
The group added total comprehensive loss narrowed to $89.9 million as compared to $115.1 million while headline loss per share diminished to 48 cents a share compared to headline loss of 61 cents in 2015. The company did not declare dividends for the year and total coal production volumes decreased to 38 percent.
The Mining Contractor’s contribution to production volumes decreased to 58 percent in 2016 from 63 percent in 2015. Total raw coal mined was 969 153 tons compared to 1 557 567 tons in 2015.Advertisement
In the results a 13 percent decrease in property, plant and equipment from to $119 million was reported while total assets were reduced to $183 million.