Coal producer Wescoal has slipped into a loss in its six months to end-September, amid waning demand for coal and production challenges at some of its operations.
The company reported a total net loss of R51m for the period, from profit of R108m previously, amid a 56% fall in coal production at its Vanggatfontein Colliery, where an extension project is under way.
Group coal production fell 16%, with the company saying it would fast-track a process to exit contractor employees to address absenteeism and lower employee productivity.
The company is facing production difficulties at its Elandspruit colliery, where underground mining remains suspended after termination by the mining contractor in October 2018.
The company reported a headline loss per share of 11.9c, from headline earnings per share of 23.5c previously.
Sales volumes in the trading segment reduced by 14% and revenue 13% to R707m, with the company citing a decline in commodity prices and lower volumes driven by waning market demand.
The trading segment’s contribution to group operating profit was R34.9m, 22% lower than the prior comparable period.
“Our key strategic objective is to stabilise our operations, then optimise our performance and scale up through primarily organic opportunities,” said CEO Reginald Demana.
“We intend to reach this objective by prudently managing costs and operational efficiencies to maximise returns from our current operations, and grow the business by exploiting the resources within our portfolio of assets with a disciplined approach,” Demana said.
Correction: November 27 2019
An earlier version of this article stated that production difficulties at the company’s Elandspruit colliery included a suspension of mining activities, although only underground mining has been affected.