Hwange Colliery remains in a precarious financial position despite narrowing its loss position by 51 percent to $43.84 million in 2017 compared to $89.91 million previously on reduced cost of sales and increased revenues.
Turnover for the year was up 37 percent to $54.50 million compared to $39.91 million during the previous year as a result of increased sales volume from 921 000 tonnes to 1.2 million tonnes in 2017.
“Although better than 2016, the period under review fell short of budgetary targets due to low production levels attributable to working capital constraints,” said Julian Muskwe, the acting chairperson in a statement of the financials.
Monthly production averaged 110 000 tonnes compared to the budgeted monthly production of 340 000 tonnes, resulting in the company failing to meet demand.
Total sales tonnage stood at 1 288 485 tonnes against a budget of 3 607 799 tonnes but higher than the 921 627 tonnes and 3 597 050 respectively for in 2016.
Cost of sales fell 32 percent to $53.15 million from $77.74 million largely as a result of reduced labour costs that emanated from a voluntary retrenchment exercise carried out during the year.
In addition to that, there was also reduction in contractor costs and contractor rates while the underground mine, coke-works and wet screen plant costs were accounted for as care and maintenance costs.
Costs of sales also reduced as a result of a non-recurring cost of $19 million incurred in 2016 relating to stock adjustment.
Muskwe said the company’s scheme of arrangement with creditors afforded the company operating space while building the financial resources to recapitalise operations.
The company’s open cast operation contributed 599 142 tonnes during the year, which represents 47 percent of the total year’s production.
Muskwe said the company remain engaged over possible takeover of its Coal Gasification Company Coke Oven Battery by Chinese partners. – The Source