Coal miner, Hwange Colliery Company Limited (HCCL) performance improved from a gross loss of ZWL 3.3 million for 2018 to a gross profit of ZWL 182 million for the year ended 31 December 2019 according to the miner’s Administrator Bekitemba Moyo.
The administrator says that on an inflation-adjusted basis, the performance improved from a gross loss of ZWL 21 million and a net loss of ZWL 487 million to a gross profit of ZWL 422 million and after-tax profit of ZWL 1.5 billion
“Revenue increased by 105% from ZWL429 million in 2018 to ZWL 881 million in 2019 on an inflation adjusted basis and on historical basis it increased by 511% from ZWL69.1 million in 2018 to ZWL422.2 million in 2019,” Moyo says.
‘This was largely due to a combination of an increase in high value coking coal sales as well as frequent adjustments to product prices in line with changes to the Interbank rates which were introduced in February 2019.”
The improved financial performance last year against 2018 was largely due to a change in the sales mix, which saw high-value coking coal production and sales going up by 20% as well as improved product pricing according to the administrator.
“Production and sales were adversely affected by the shortage of diesel coupled with unavailability of wagons. There was a production gap of 64% in total coal mined of 1,013,932 tonnes, compared to sales potential of 2,819,298 tonnes,” Moyo says.
“The market remains with a high appetite for our product as evidenced by our 2019 order book. The Marketing Department was capacitated by two field vehicles which were purchased during the period under review, and which increased market visibility.”
The net loss position increased from ZWL 78 million to ZWL 91 million due to an exchange loss of ZWL 322 million on legacy foreign creditors.
Coal mining companies were regarded as essential services which were to continue operating during the first 21 days of lockdown in Zimbabwe.
Moyo said, “The company operations were however affected by the pandemic as some customers and suppliers are closed due to lockdown.
“The company will continue to operate and is fully aware of the potential risk to the business of the pandemic until it is under control.”
