Wescoal eyes sustainable growth - CNBC Africa

Wescoal eyes sustainable growth

Earnings

by admin 0

Wescoal is a coal mining, processing and trading firm based in South Africa. PHOTO: Getty Images

Group revenue for the year ended 31 March 2014 was up 69.5 per cent to 1.1 billion rand from 676.9 million rand in 2013, having exceeded the billion rand mark for the first time. 

Operational earnings before interest, tax, depreciation and amortisation (EBITDA) were also up 123.6 per cent to 101.2 million rand from 45.3 million rand in 2013.

“These results depict a solid financial performance despite some challenges which arose in the second half of the financial year including reduced take off from Eskom and the integration of MacPhail into the trading division,” Wescoal said in a statement.

Cash reserves took a similar turn by increasing 143.3 per cent to 52 million rand for the period under review from 21.4 million rand in 2013.

Headline earnings per share were up 28.7 per cent to 15.7 cents from 12.2 cents in the previous comparative year.

[DATA WSL:Wescoal Holdings Limited] is a coal mining, processing and trading firm based in South Africa.

“Gross profit of 125.5 million rand is an increase of 72.7 per cent on the comparative financial period mainly due to the increase in revenue. Margins remained relatively static at 10.9 per cent however operating costs increased by 66.4 per cent to 81.3 million rand due primarily to the establishment of the Intibane Colliery and the incorporation of the MacPhail acquisition for four months,” Wescoal said in a statement.

(WATCH VIDEO: Wescoal to acquire MacPhail)

Profit after tax was recorded at 86.6 million rand, and includes the 61.5 million rand once-off profit on the sale of mineral rights. Headline earnings and headline earnings per share were respectively 37.9 per cent and 28.7 per cent up on the comparative
period.

Operating profit grew to 118.8 million rand for the period under review from 27.7 million rand in 2013, and profit for the year grew significantly to 86.6 million rand from 19.7 million rand in 2013.

“The commissioning of the Intibane colliery in June 2013 contributed significantly to the results from the division producing 1.03 million tons of the 1.92 million tons of total production,” Wescoal explained.

Wescoal added that due to Eskom operational reasons, its Khanyisa colliery delivered significantly less coal to the utility during the second half of the year, which affected the profitability of the colliery.

Mining revenues nonetheless grew to 556.2 million rand from 318.4 million rand in 2013, EBITDA grew to 103.7 million rand from 50.7 million rand, and profit from operations came in at 52.3 million rand from 34.7 million rand in 2013.

(READ MORE: Wescoal produces excellent interim results)

Revenues for the company’s trading division came in significantly higher at 591.2 million rand from 358.6 million rand in 2013, EBITDA at 9.3 million rand from 6.1 million rand, and profit from operations was marginally up at 4.7 million rand from 4.2 million rand in 2013.

“Major coal producers are reviewing mineral assets on an on-going basis and will dispose of non-core operations,” said Wescoal.

“This could potentially bring opportunity for Wescoal to further enhance its asset base and sustainability.”

Comments