Coal producer, Hwange Colliery Company Limited (HCCL) leapfrogged to viability in its Half Year financial performance ending 30 June 2019, posting a ZWL$ 3.5 million profit rebound from its previous loss position of ZWL$ 23 million same period last year.
Revenue increased by 128% from ZWL$30.5 million for the six month period under review to ZWL$69.8 million.
The Company adopted a low cost, high productivity strategy which resulted in operating profit of ZWL$ 16.3 million.
“It is interesting to note that HCCL production increased marginally from 344,694 tonnes to 394,704 tonnes and it has continued to increase for the first three month of the second half from 158 981 tonnes to 224 191 tonnes,” Company Administrator, Bekithemba Moyo said in a statement.
However, the company continues to succumb under the weight of massive debts and production inefficiencies.
Total production declined owing to a combination of antiquated machinery, a working capital gap and the contract miner who stopped operations between December of 2018 and July of 2019.
“The contract miner stopped mining on or about 15 December 2018 and only resumed mining in August 2019. In addition, the company only resumed open cast mining in March 2019. Owing to the above, production declined by 52% from 819,859 to 394,704 for the period under review,” added Moyo.
Hwange needs at least US$ 50 million to get out of the woods as it seeks to recapitalize on machinery and equipment among other needs.
Total assets marginally grew to ZWL$ 184.8 million during the period under review from ZWL$ 181.7 million.
Open pit mining averaged 32,073 metric tonnes per month whilst underground mining averaged 21,000 metric per month during the period under review.
Open cast operation contributed 195,173 tonnes for the half year which represents 60% of the total half year production.
The company is working on stabilizing the underground mine operation which averaged 21,000 tonnes per month for the period under review against a target of 50,000 tonnes per month, which will contribute significantly to the Company’s bottom line and enhance exports.
