Troubled Hwange Colliery posts $37 million loss

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COAL miner Hwange Colliery’s full year losses increased by nearly 16 percent to $37 million in the full-year to December 2014 on non-recurring items which cost the company $13 million.
The company’s loss position, excluding non-recurring items was $23,7 million from the $31,6 million posted in the previous year.
Revenue marginally grew by 1,5 percent to $72 million from $71,5 million in 2013. Sales volumes grew by six percent to 1.7 million tonnes buoyed by a 23 percent increase in production.
“The improved overall sales performance was attributed to increased production throughput,” said the group in a statement.
However, production volumes were below target at 1.8 million tonnes due to outdated company’s plant and equipment.
The company is eying to increase monthly production to 450,000 tonnes from June through its mining and contribution by a contractor.
Hwange Colliery is planning to hike coal prices.
“The current prices of $29 per tonne is unsustainable and Hwange Colliery Company will be pushing for a price increase of up to $35 per tonne. This is essential to ensure that coal supplies to all power stations remain stable.
“Hwange Colliery Company is of the view that this should not translate into a power tariff increase as the price of our HPS coal is relatively underpriced,” said the company.
Coal fines sales were 20 percent up compared to the prior year attributable to the demand from cement manufacturers. Sales of coal fines of 242,735 tonnes were 20 percent above the 201,610 tonnes sold the previous year.
The company decried the impact of the legacy debt on its operations.
“The impact of the legacy debts on current cash flows continued to inflict pain on the operations of the Company and torpedoed the turnaround initiatives,” it said.
“During the year under review, a total of $25 million was paid towards liquidation of legacy debts whose balance has come down to $136 million. This is in addition to $35 million which was applied to legacy debts in 2013.”Advertisement