HWANGE Colliery Company (HCC) plunged to a $3,2 million after-tax loss in the first six months of the year ended June 30, attributed to a poor cash-flow and high legacy debts.
The company has debts in excess of $140 million. Sales revenue for the six months was down to $40,4 million from $51,8 million.
Finance costs increased to $1,1 million from $0,9 million due to penalty rates on overdue borrowings.
“The company incurred an audited loss after taxation of $3,2 million and compares unfavourably to the $0,5 million profit recorded for the same period in 2012,” said HCC chairman Farai Mutamangira a statement accompanying the group’s interim results.
Coal sales during the period under review amounted to 913 440 tonnes down from 918 491, while coke sales volumes declined to 25 839 tonnes from 68 336.
Deliveries to Hwange Power Station at 580 818 tonnes were 56% above of the 373 126 tonnes supplied during the same period last year.
In an effort to boost production, Mutamangira said the company had embarked on a number of recapitalisation initiatives that were expected to result in improved production performance.
“The company has taken delivery of the mining equipment worth $11 million from Sany Heavy Equipment Company Limited of China and the commissioning was expected to be completed by September 30 (today),” said Mutamangira.
“This equipment will augment the mining machinery worth $7 million procured in October 2012. Another initiative of procuring drilling equipment from South Africa is at an advanced stage and should be concluded in time for delivery of the drills in the fourth quarter of 2013.”
He said the company would continue with its cost containment thrust through the rationalisation of its operations.
Coke and coal products, Mutamangira said, would remain targeted at both local and regional countries.
The company has in recent months embarked on a retrenchment exercise.