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HWA
HWHWA
HWA - Hwange Colliery Company - Abridged Income Statement For The Six Months
Ended 30 June 2008
HWANGE COLLIERY COMPANY LIMITED
(Incorporated in Zimbabwe)
Code: HWA & ZW0009011934
Abridged income statement For the six months ended 30 June 2008
INFLATION ADJUSTED
6 MONTHS 6 MONTHS 12 MONTHS
30 JUNE 2008 30 JUNE 2007 31 DEC 2007
$`000 000` $`000 000` $`000 000`
Sales Revenue 131 740 837 975 27 471 287 323 65 957 984 788
Profit from (218 146 288 697) (8 760 652 579) 3 348 258 689
operations
Monetary 16 905 920 713 169 863 303 683 (7 177 658 428)
adjustment
(201 240 367 984) 161 102 651 104 (3 829 399 739)
Finance costs 1 063 484 186 2 095 599 370 (7 893 220 617)
Fixed assets - (7 648 854 229) 603 363 443
impairment
(loss)/
reversal
Write-down - 192 932 221 -
investments
Profit (200 176 883 798) 155 742 328 466 11 119 256 913)
before
taxation
Taxation (633 993 652 320) (56 384 732 (4 273 528 335)
760)
Profit (834 170 536 118) 99 357 595 706 (15 392 785 248)
after
taxation
Attributable - basic (457 832 346 936) 55 883 233 896 (8 448 290 476)
earnings per
share
(cents)
- diluted (457 832 346 936) 55 883 233 896 (8 448 290 476)
Headline - basic (463 263 755 634) 55 883 252 891 (8 448 550 459)
(loss)/
earnings
per share
(cents)
- diluted -463,263,755,634 55,883,252,891 -8,448,550,459
Number of 182,200,000 177,795,000 182,200,000
Shares
Reconci-
liation
between
(loss)/
earnings and
headline
(loss)/
earnings
(Loss)/Profit -834,170,536,118 99,357,595,786 -15,392,785,248
after
taxation
Impairment 0 67,875 0
of fixed
assets
Sale of -9,896,026,647 -34,105 -473,688
scrap
Headline -844,066,562,765 99,357,629,556 -15,393,258,936
(loss)/
Earnings
after
taxation
ABRIDGED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2008
HISTORICAL COST
6 MONTHS 6 MONTHS 12 MONTHS
30 JUNE 2008 30 JUNE 2007 31 DEC 2007
$`000 000` $`000 000` $`000 000`
Sales Revenue 96 600 919 964 108 775 1 645 362
Profit from 34 496 954 673 (43 378) 17 293 166
operations
Monetary - - -
adjustment
34 496 954 673 (43 378) 17 293 166
Finance costs (264 193 517) 707 (361 668)
Fixed assets - - -
impairment
(loss)/reversal
Write-down - - -
investments
Profit before 34 232 761 156 (42 671) 16 931 498
taxation
Taxation (2 999 077 (3 963) ( 3 513 882)
211)
Profit after 31 233 683 945 (46 634) 13 417 616
taxation
Attributable - basic 17 142 526 863 (26 229) 7 364 224
earnings per
share (cents)
- diluted 17 142 526 863 (26 229) 7 364 224
Headline - basic 17 138 499 220 ( 26 344) 7 340 324
(loss)/
earnings per
share
( cents)
- diluted 17,138,499,220 -26,344 7,340,324
Number of 182,200,000 177 795 000 182 200 000
Shares
Reconciliation
between
(loss)/earnings
and
headline
(loss)/earnings
(Loss)/Profit 31,233,653,945 (46 634) 13 417 616
after taxation
Impairment of 0 - -
fixed assets
Sale of scrap -7,338,367 (204) (43 546)
Headline 31,226,315,578 -46,838 13,374,070
(loss)/earnings
after taxation
ABRIDGED BALANCE SHEET AS AT 30 JUNE 2008
INFLATION ADJUSTED
6 MONTHS 6 MONTHS 12 MONTHS
30 JUNE 2008 30 JUNE 2007 31 DEC 2007
$`000 000` $`000 000` $`000 000`
Assets
Non-current 3 835 092 435 701 272 364 261 702 1 168 349 328 783
assets and
investments
Current assets 413 726 660 332 53 660 840 909 60 982 056 630
4 248 819 096 033 326 025 102 611 1229 331 385 413
Equity and
Liabilities
Share capital 100 579 387 310 - 100 579 387 310
Reserves and 2791 162 037 018 232 774 957 532 820 010 939 417
retained profits
Shareholders 2891 741 424 328 232 774 957 532 920 590 326 727
equity
Deferred 999 231 802 835 78 704 978 202 300 857 540 102
taxation
Current 357 845 868 870 12 417 155 571 7 883 518 584
liabilities
Long Term - 2 128 011 306 -
Liabilities
4248 819 096 033 326 025 102 611 1229 331 385 413
ABRIDGED BALANCE SHEET AS AT 30 JUNE 2008
HISTORICAL COST
6 MONTHS 6 MONTHS 12 MONTHS
30 JUNE 2008 30 JUNE 2007 31 DEC 2007
$`000 000` $`000 000` $`000 000`
Assets
Non-current assets 3 851 275 471 099 34 884 384 819 406
and investments
Current assets 316 393 456 416 65 497 5 203 214
4167 668 927 515 100 381 390 022 620
Equity and
Liabilities
Share capital - - -
Reserves and 2836 741 896 295 (36 205) 288 472 203
retained profits
Shareholders 2836 741 896 295 (36 205) 288 472 203
equity
Deferred taxation 973 081 162 189 7 508 98 903 085
Current 357 845 869 031 110 192 2 647 332
liabilities
Long Term - 18 886 -
Liabilities
4167 668 927 515 100 381 390 022 620
Abridged Cash Flow Statement For the six months ended 30 June 2008
INFLATION ADJUSTED
6 MONTHS 6 MONTHS 12 MONTHS
30 JUNE 2008 30 JUNE 31 DEC 2007
2007
$`000 000` $`000 000` $`000 000`
Cash flows from
operating
activities
Operating (201 240 367 161 102 651 104 (3 829 399 739)
(loss)/profit 984)
Non - cash items (112 768 973 (141 976 035 978) (24 720 051 573)
424)
Operating cash flow
before investment
in working capital (314 009 341 19 126 615 126 28 549 451 312)
408)
Net movement in (2 782 253 414) (5 554 157 713) 51 054 243 966
working capital
Net financing 1 063 484 186 2 095 599 370 (7 893 220 617)
income /(cost)
(315 728 110 15 668 056 783 14 611 572 037
636)
Tax Paid - (477 399) (3 141 696)
Net cash flows from (315 728 110 15 667 579 384 14 608 430 341
operating 636)
activities
Cash flows from
investing
activities
Net cash flow (2 192 814 330) (6 550 732 905) (5 286 143 083)
related to fixed
assets
Net cash flow (317 920 924 9 116 846 479 9 322 287 258
before financing 966)
activities
Cash flows from
financing
activities
Increase in share - - 6 786 659
premium
(Decrease)/ 333 123 983 636 (9 333 087 102) (9 339 737 816)
Increase in loans
Net movement 15 203 058 670 ( 216 240 623) (10 663 899)
in cash and
cash equivalents
Represented by:
Cash and cash 579 281 078 504 347 799 589 944 977
equivalents at
beginning of the
year
Cash and cash 15 782 339 748 288 107 176 579 281 078
equivalents at
end of the period
Increase/(decrease) 15 203 058 670 ( 216 240 623) ( 10 663 899)
in cash and cash
equivalents
ABRIDGED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2008
HISTORICAL COST
6 MONTHS 6 MONTHS 12 MONTHS
30 JUNE 2008 30 JUNE 2007 31 DEC 2007
$`000 000` $`000 000` $`000 000`
Cash flows from
operating
activities
Operating 34 496 954 673 (43 378) 17 293 166
(loss)/profit
Non - cash items (350 102 419 599) (180) (18 025 032)
Operating cash flow
before investment
in working capital (315 605 464 926) (43 558) (731 866)
Net movement in (3 818 171 772) 56 285 293 422
working capital
Net financing ( 264 193 517) 707 (361 668)
income /(cost)
(319 687 830 215) 13 434 (800 112)
Tax Paid - -2 1
Net cash flows from (319 687 830 215) 13 432 (800 111)
operating
activities
Cash flows from
investing
activities
Net cash flow ( 748 378 981) (32 150) (38 901)
related to fixed
assets
Net cash flow (320 436 209 196) (18 718) (839 012)
before financing
activities
Cash flows from
financing
activities
Increase in share - - 79
premium
(Decrease)/Increase 336 218 354 417 20 976 1 033 160
in loans
Net movement in cash 15 782 145 221 2 258 194 227
and cash equivalents
Represented by:
Cash and cash 194 527 299 299
equivalents at
beginning of the
year
Cash and cash 15 782 339 748 2 557 194 526
equivalents at end
of the period
Increase/(decrease) 15 782 145 221 2 258 194 227
in cash and cash
equivalents
STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2008
Share Capital Gene- Retained Total
Capital Reserves ral Profit
Rese-
rves
$`000 000` $`000 000` $`00 $`000 000` $`000 000`
0
000`
HISTO-
RICAL
COST
Balance - 275 044 164 - 13 428 039 288 472 203
as at 1
January
2008
Net - - - 31 233 683 945 31 233 683 945
Profit
for
the
half
year
Reva- - 3778 073 724 - - 3778 073 724
luation 104 104
surplus
Transfer (972 853 983 - - (972 853 983
to 957) 957)
deferred
tax
Balance - 2805 494 784 - 31 247 111 984 2836 741 896
as 311 295
at
30 June
2008
INFLATIO
N
ADJUSTED
Balance 100 579 820 010 939 417 - 101 893 571 920 692 220
as at 1 387 310 298
January
2008
Net - - - (834 170 536 (834 170 536
Profit 118) 118)
for
the
half
year
Reva- - 3778 073 724 - - 3778 073 724
luation 104 104
surplus
Transfer - (972 853 983 - - (972 853 983
to 957) 957)
deferred
tax
Balance 100 579 3625 230 679 - (834 068 642 2891 741 424
as 387 310 564 547) 327
at 30
June
2008
STATEMENT TO SHAREHOLDERS
(For the six months ended 30 June 2008)
BUSINESS ENVIRONMENT
The hyperinflationary environment continued into the first six (6) months of the
year negatively impacting on the costs of doing business. The year on year
inflation rate as at 30 June 2008 was 11.2 million percent up from 157 184%
recorded in June 2007. The foreign exchange management system was deregulated
and the Reserve Bank of Zimbabwe`s 2008 First Quarterly Monetary Policy
Statement introduced an interbank exchange rate determined by the market forces.
The interest rates remained high on the money market and not conducive to local
borrowings. Foreign currency shortages continued to affect the economy thus
curtailing imports and debt servicing.
OPERATIONS
Frequent breakdowns of critical equipment, especially the conveyor systems for
moving coal from the mines, had an impact on the tonnage that could have been
produced in the first half of the year.
This was on the backdrop of increased demand for coal and coke on both the local
and regional markets. Total coal sales for the six months period under review
decreased by 19% from 1 069 890 tonnes achieved during the same period last year
to 862 392 tonnes despite the mining contract that the Company entered into in
October 2007.
HPS coal deliveries to Hwange Power Station amounted to 589 329 tonnes compared
to 776 168 tonnes achieved for the same period last year representing a 24%
decrease. HCC/HIC coal deliveries marginally decreased by 7% to 273 063 tonnes
(June 2007 - 293 722 tonnes).
Coke sales increased by 8% from 87 966 tonnes for the same period in 2006 to 94
599 tonnes as a result of the Company`s export drive.
There were no coke oven gas supplies to the Hwange Power Station for the first
six (6) months of 2008 as compared to 7 152 650 Nm3 supplied during the same
period last year due to the major breakdown on the gas pipeline.
FINANCIAL REVIEW
The unaudited accounts were prepared in compliance with International Financial
Reporting Standard (IFRS) and International Accounting Standard (IAS) 29
(Financial Reporting in Hyperinflationary Economies). The accounts have also
been done in compliance with International Accounting Standard (IAS) 34
(International Financial Reporting). However, the following comments on the
financial statements are based on the historical cost figures using the Zimbabwe
dollar currency.
The Company achieved sales revenue of $96.6 quadrillion for the six months under
review and this was way above the $108.8 billion for the same period last year.
The resultant unaudited net profit after taxation of $31.3 quadrillion compared
favourably to a net loss of $46.6 billion incurred for the same period last
year. This was largely attributed to the adoption of stringent cost control
measures across the board and proactively engaging the National Incomes and
Pricing Commission for equitable selling prices of products especially HPS coal,
prices of which still remained relatively depressed throughout the period under
review.
Total fixed assets, investments and capital reserves increased to $3 829
quadrillion as compared to $34.9 billion for the same period last year. This is
attributed to a net revaluation on property plant and equipment as at 30 June
2008.
OUTLOOK
The acquisition and delivery of the coal fines recovery plant from Republic of
South Africa is still in progress and other alternatives were being pursued from
Peoples` Republic of China.
As a permanent solution to operational bottlenecks, the Company is pursuing its
recapitalization programme to be implemented by year end. This would
significantly boost production and should be able to achieve sustainable
production output that would increase the company`s market share.
The demand for coal and coke products is expected to remain firm in both the
domestic and export markets.
The focus for the second half of the year would be on improving margins through
increased productivity, increased exports, tight cost control measures and
achieving viable product prices through continuous engagement of the National
Incomes and Pricing Commission.
DIVIDEND
In light of the performance of the Company and the need for recapitalization of
the business, the Board has not considered the declaration of any interim
dividend.
DIRECTORATE
There were no changes to the Board of Directors since the Annual General
Meeting.
By Order of the Board
T K NCUBE
COMPANY SECRETARY
29 August 2008
Registered Office
7th Floor, Coal House
17 Nelson Mandela Avenue
P O Box 2870
Harare
Zimbabwe
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
30 September 2008
Date: 01/10/2008 07:05:08 Produced by the JSE SENS Department.
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