Hwange records loss


Hwange Colliery Company Limited (HCCL) registered an after tax loss of $1,5 million despite an 8% jump in sales revenue in the first six months of the year.

Sales revenue for the mining firm grew to $48,6 million compared to $42,2 million during the same period last year.

“The company incurred an unaudited net loss after taxation of $1,5 million and this compared unfavourably to the $4,5 million profit recorded for the same period in 2010,” HCCL company secretary Thembelani Ndlovu said in a statement accompanying its unaudited financial resulst for the six months ending June.

“This negative financial performance is attributed to the increase in overhead costs against stagnant production volumes and prices of products. The cost of short-term borrowings, increase in fuel prices and mining contract costs impacted negatively on the company.”

During the period under review, HCCL entered into discussions with potential new clients including New Zimsteel (formerly Ziscosteel).

Total coal sales for six months were down to 1 161 427 tonnes from 1 178 724 tonnes. Coal deliveries to Zimbabwe Power Company amounted to 688 263 tonnes from 769 340 tonnes.

Hwange’s coking coal and industrial coal sales increased by 14% from 319 159 tonnes during the same period last year to 364 688 tonnes during the period under review.

The company recorded a 5% increase in coke sales from 18 198 tonnes in the first half of 2010 to 18 943 tonnes.

Ncube said export marketing efforts were negatively affected by a global recession that depressed demand and prices of fossil fuels in general.

He said the company remained focused on long-term recapitalisation programme that should permanently address the perennial challenges of aged and obsolete machinery.

“The prospects of foreign lines of credit from regional financial institutions are being pursued and look positive,” said Ncube.

The company secretary noted that high level strategic dialogue would be enhanced between HCCL, Zesa Holdings, National Railways of Zimbabwe and New Zimsteel.