Troubled Hwange returns to profit

Harare(New Ziana) – Hwange Colliery Company Limited (HCCL) has returned to profitability, posting a net profit of $3.5 million for the six months ended June, 2019, bouncing back from a $23 million loss in the comparable period last year, the company’s curator said on Thursday.

The Zimbabwe Stock Exchange listed coal miner was placed under administration in October last year as government, the major shareholder in the firm, sought to protect it from potential liquidation.

The company had for long struggled with viability and corporate governance issues despite constant changes in management that failed to bear fruit.

Before being placed under reconstruction, the mining firm had initially been put under a High Court sanctioned revival scheme which sought to return it to profitability to be able to pay off its creditors, but the arrangement also failed to achieve positive results.

HCCL administrator, Bekithemba Moyo said the company was in recovery mode, and expressed optimism it had sustainably turned the corner.

“The company’s financial performance for the period under review improved in comparison to the same period in the 2018 financial year,” Moyo said.

“The company’s revenue increased by 128 percent from ZWL$30.5 million for the six months ended 30 June 2018 to ZWL$69.8 million for the period under review.”

Coal production at HCCL alone marginally increased to 394 704 tonnes from 344 694 tonnes in the comparable period.

But it declined 52 percent to 394 704 tonnes at Mota Engil, a firm contracted by HCCL to assist with production.

But working capital constraints and antiquated equipment impacted
production, Moyo said.

In the second half, the firm is targeting to produce about 250 000
tonnes per month, and also up production of the lucrative coking coal.
“Going forward, the plan is to invest in a coke oven battery with beneficiation in mind and this should result in a significant increase
in revenues,” Moyo said.

While the operating environment remained tough, Moyo said “I am happy with the progress made to date and remain confident that the various interventions made, will result in a positive turnaround of the company’s fortunes.”

New Ziana