Harare – Embattled coal miner, Hwange Colliery Company Limited has reported a US78.4 million loss for the year ended 31 December 2018 compared to US$43.8 million in the same period last year, representing an increase of 79 percent despite registering an increase in revenue over the review period.
The Company’s Administrator Mr Bekitemba Moyo said the financial performance “was poor” against comparable period in 2017 despite increased production and sales volumes mainly as a result of the impairment of some assets as well as subdued coal prices against increased input costs.
Revenue increased by 27% from US$54.5 million in 2017 to US$69.1 million in 2018 attributed to increased sales volume from the 1.2 million tonnes recorded in 2017 to 1.5 million tonnes in 2018.
Hwange has been treading on a rough path over the years and in October 2018, government placed the Company under administration to allow it to recover and potentially return to profitability.
Its listing on the Zimbabwe Stock Exchange and the JSE Ltd was subsequently suspended on 02 November 2018 and remains suspended.
The company’s performance for the period under review also fell short of budgetary targets due to low production levels attributable to working capital constraints.
“Monthly production average was 150,000 tonnes compared to the budgeted monthly production of 300,000 tonnes,” said Moyo.
“As a result, the Company failed to meet the market demand.”
Total sales tonnage was 1,522,209 tonnes against a budget of 3,541,860 compared to 1,288,485 and 3,607,799 respectively recorded in 2017 while cost of sales increased by 36 percent as a result of increased input cost driven by the parallel market exchange rate that was being used by most suppliers to charge their products in RTGS.
Headline loss per share worsened to US$0.31cps, which represents a loss of USD$0.20cps from prior year.
Moyo has however, expressed optimism that the Company is poised to turn around its fortunes as evidenced by an increase in sales and production volumes.
The earnings release show that production during the period increased to 1.79 million tonnes from the 1.2 million tonnes recorded in 2017.
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