Struggling coal miner Hwange Colliery Company (HCC)’s restated unaudited financial results for the six months to June 30 last year showed that losses skyrocketed by more than 400 percent to $44 million on a higher tax bill and plummeting sales, the company said on Monday.
Acting chairman Jemister Chininga said the republication of the interim financial results has been necessitated by materiality of the final Zimbabwe Revenue Authority liability with an additional tax bill of $28,5 million, pushing the final figure owed to the taxman to $69,1 million following of a special exercise covering the period 2009 to 2015.
Chininga said the amount had previously been reported as a contingent liability.
In the period under review, sales revenue was $35,4 million compared to the $39,9 million recorded the same period in the previous year.
“The sales revenue for the six months under review was $35,4 million compared to the $39,9 million revenue recorded during the same period last year. The company incurred a loss after taxation of $44,1 million compared to the $7,9 million loss recorded for the same period in 2014,” he said.
Chininga said the operating loss stood at $48 million compared to $7,6 million.
Finance costs were flat at $1,1 million.
“The burden of servicing legacy debts continued to strain the company’s cash flows and this presented working capital challenges,” he said.
Coal and coke sales were down 10 percent to 685,759 tonnes during the period under review resulting in an 11 percent decline in revenue to $35,3 million.
The company said it is engaged with government over conversion of a $5 million tax liability to equity, which will be structured through a fully underwritten rights issue and private placement.
Headline loss per share more than doubled to 0,09 cents.
Going forward, Chininga said the company has introduced cost cutting measures that will reduce the cost of coal.
“The infrastructure costs of maintaining the town and utilities will be shared with other coal mining companies and stakeholders around Hwange. The reduction of overheads through management salaries and benefits cut is being finalized,” he said.