admin
“All payments for the equipment have been funded from internally-generated resources,” he said in a statement accompanying its 2012 results.
The chairman said Hwange Colliery would engage “credible” contractors on a short-term basis while awaiting the delivery on the equipment and machinery.
Earlier, acting managing director Mr Stanford Ndlovu said the delivery of the new equipment would ensure the company doubles production to about four million tonnes.
In December last year, the Zimbabwe Stock Exchange-listed coal miner acquired open-cast equipment worth US$6 million from South Africa, through a short-term funding facility structured with one major customer.
Mr Mutamangira said the company had also engaged a financial advisory firm to spearhead the raising of long term credit to recapitalise its operations.
Challenges in recapitalising the company have restricted the turnaround of the business. A full recapitalisation of US$175 million is required, according to the management.
Last year, the company sold two million tonnes of coal and coke, down from 2,5 million tonnes a year ago. Production was mainly affected by equipment inefficiencies.
Total coal sold was 1,68 million tonnes, down from 2,4 million tonnes sold a year earlier while coke sales (including breeze) rose to 228 201 tonnes from 74 877 tonnes.
Hwange Power Station accounted for 54 percent of coal sold in 2012. Exports rose by 28 percent to 260 803 tonnes, up from 203 096 tonnes. Hwange’s main export markets include Zambia, the Democratic Republic of Congo and South Africa.
Revenue for the period fell to US$104,2 million from US$107,8 million in 2011.
Export revenue of US$26,1 million accounted for 25 percent of the total turnover compared with US$13,4 million which was equivalent to 12 percent a year earlier.
Hwange says the export revenues are expected to continue rising, given the anticipated increase in production volumes and the delivery of the new equipment.
Operating profit was up 73 percent from US$4,1 million a year ago to US$7,1 million. Net earnings declined to US$3,1 million compared with US$3,9 million. Administrative costs were down US$27,5 million from US$31,2 million in 2011.
Borrowings amounted to US$31,6 million.
The loans have been rescheduled to periods of up to 24 months and are currently being serviced through ring fencing of specific customers.
Borrowings with amounts of US$1 million and below were currently being liquidated on the basis of arrangements with lenders.
The company remains troubled by legacy debts accumulated in the last five years.
“These debts have been subjected to forensic audit and when verified, a comprehensive plan to discharge the liabilities will be put in place,” said Mr Mutangamira.
In the short term, cost-cutting measures have improved margins, creating capacity acquisition of equipment and servicing of the debts.
In the medium-term, the company would focus on increasing sales while in the medium-to-long term, the company has set sights on acquiring new concessions and the development of new mines in partnership with strategic partners.
Mr Mutamangira said the board was reviewing business models to align the company with operating the environment.
Rationalisation of overheads will also continue.
Online Reporter