Hwange Colliery back in the red

Published: 31 March 2014

Hwange Colliery Company experienced a huge dive in profits as the company continues to sag under huge debts which it is failing to pay off.

For the year to December 31 2013 the company recorded a loss $30,9 million compared to a profit of $3,1 million last year.

Total sales volume also significantly went down from 1,9 million tones in the prior period to 1,6 million tones. The 16 percent decline in sales was attributed to low production throughput.

Board chairman Farai Mutamangira said export sales of coke and coke breeze for the period was 57 percent lower than the previous year as a result of shutdown of some customers' operations in the DRC. HPS coal supplied to Hwange Power station increased by 3 percent from 901 480 tonnes in 2012 to 924 659 tonnes in the review period.

Mutamangira said although the coal grade accounted for 57 percent of coal sales volume, its contribution to revenue was 35 percent.

Sales of coal fines amounted to 201 610 tonnes compared to 233 453 tonnes sold the previous year.

The company recorded a turnover for the year of $71,5 million compared to $104,2 million in the comparable period. The low production volumes and a reduction in prices contributed to the decline in revenue.

Current liabilities amounted to $162,3 million during the period under review compared to $125,2 million in the previous year. This comprised mainly of trade payables amounting to $132,8 million and borrowings of $19,4 million.

Trade payables increased because of the company's reliance on creditors to finance the business.

Finance costs went down to $3,4 million in 2013 from $4,2 million due to the company's failure to service some of its loans.

The company also recorded an attributable and headline loss per share on basic and diluted shares of $0,17c from a profit of $0,02.
- BH24