| Wed 30 Sep 2009, 7:10 | | HWA - Hwange Collliery Company - Consolidated Interim Results For the six months |
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HWA
HWHWA
HWA - Hwange Collliery Company - Consolidated Interim Results For the six months
ended 30 June 2009
HWANGE COLLLIERY COMPANY LIMITED
(Incorporated in Zimbabwe)
Code: HWA ISIN: ZW0009011934
CONSOLIDATED INTERIM RESULTS
(For the six months ended 30 June 2009)
OVERVIEW
The period under review witnessed significant changes in the macro and micro
economic environment in particular the introduction of the multicurrency system.
Political and economic stability followed the formation of the inclusive
Government and this boosted the business climate in Zimbabwe.
While generally welcome, the dollarisation of the economy resulted in liquidity
challenges for most industries. The demand for coal and coke was therefore
adversely affected.
The prices of products were low and were market determined and comparable to
regional and international benchmarks. Even though the foreign exchange
management system was liberalised, there was limited availability of foreign
lines of credit because of the global recession. There were many company
closures around the country thereby negating coal demand.
OPERATIONS
Coal production was adversely affected by the frequent breakdowns that
characterised the aged mining and processing equipment, and the outage of the
dragline pending major repairs and service. This was coupled with the low demand
for products by the market consequent to the low capacity utilisation in
industry as well as the liquidity crunch affecting the company.
Total coal sales for the six months period under review decreased from 862 392
tonnes achieved during the same period last year to 401 114 tonnes. Total coal
exports amounted to 4 271 tonnes, the bulk of which were coal fines for the
cement industry. Local coal fines despatches to cement industry amounted to 79
396 tonnes.
HPS coal deliveries to Hwange Power Station for the period under review were 218
683 tonnes compared to 589 329 tonnes for the same period last year. HCC coal
sales decreased from 198 086 tonnes as at 30 June 2008 to 103 035 tonnes as at
30 June 2009.
Coke sales decreased from 72 494 tonnes for the same period last year to 15 114
tonnes. There was limited coke production during the period under review because
the coke oven battery was not operational. The bulk of the tonnage (14 075
tonnes) was exported because local customers were on production stoppage.
There were no coke oven gas supplies to the Hwange Power Station as was the case
during the same period last year due to the gas pipeline being out of
commission.
FINANCIAL RESULTS
This is the first time the Company is reporting its results in United States
Dollars following the introduction of the multi currency system.
The Company`s sales revenue for the six (6) months under review was US$23.6
million. The revenue was negatively affected by the combined effect of the
decline in demand for products and the prevailing low prices.
The company`s cost management programmes resulted in an operating profit of US$1
503 739. The net profit after taxation for the first six (6) months of the year
amounted to US$1 658 963.
Total fixed assets and investments were revalued to US$77.6 million as at 30
June 2009 from an amount of US$ 192.6 million as at 31 December 2008. The
property, plant and equipment as well as investment properties in Harare and
Bulawayo were revalued by professional valuers.
OUTLOOK
The operating environment presents some opportunities for business stability and
growth. The local and regional industries, which had been affected by the global
economic crisis, are expected to increase capacity utilisation. This implies an
increase in demand for coal and coke products.
Following the servicing of the dragline and refurbishment of the coke oven
battery, the production volumes are expected to increase. Focus would also be on
recapitalizing the other key sections of the production process that support
this increase in coal and coke volumes.
The company`s profitability will be driven by competitive cost structures and
improved margins through increased productivity.
Despite the brain drain that affected all companies in Zimbabwe, Hwange Colliery
Company has managed to retain its core skills base that will support the
company`s initial production ramp up programme.
DIVIDEND
The Board has resolved not to consider any interim dividend given the need for
the company to recapitalise its operations.
DIRECTORATE
Mrs Priscah Mupfumira was appointed to the Board of Directors on 10 July 2009.
By Order of the Board
T K NCUBE
COMPANY SECRETARY
24 September 2009
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 30 JUNE 2009
1. ACCOUNTING POLICIES
These financial statements have been prepared under the historical cost
convention except for certain financial instruments and investment properties,
which are stated at fair value.
2. BASIS OF PREPARATION
The abridged interim financial statements for the half year ended 30 June 2009
have been prepared in accordance with IAS 34, `Interim financial reporting`.
The abridged financial statements have been prepared in United States Dollars
(USD). The Zimbabwe dollar became inactive following the liberalization of the
exchange controls and the introduction of multiple currencies as announced in
both the Budget and Monetary Policy statement of 2 February 2009. The company
adopted the US dollar as its functional and presentation currency after this
pronouncement.
These abridged financial statements have been prepared in compliance with the
"Draft Guidance: change in functional currency 2009" as circulated by the
Institute of Chartered Accountants (ICAZ) to its members. The guidance took into
account the financial reporting principles inherent in International Financial
Reporting Standards (IFRSs). Professional judgement was also used in the
preparation of these financial results.
3. COMPARATIVES
Comparatives for the financial statements have not been published because it was
not practical to determine these figures as described above. The Board is of the
view that the cost of preparing these numbers outweighs the benefits and could
mislead users of financial information.
4. SHARE CAPITAL
The authorised and issued share capital consists of 186 000 000 ordinary shares.
On 1 January 2009, the par value of these shares was denominated in Zimbabwe
dollars. Issued share capital was therefore carried at nil values. A
shareholders` resolution was passed at the Annual General Meeting, held on 26
June 2009, to convert the new par value of these shares to United States
Dollars. Subsequent to this resolution, the increase in the nominal value of
share capital was capitalised from the functional change currency reserve.
THE COMPANY`S CONSOLIDATED UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2009 ARE AS FOLLOWS:
6 MONTHS 12 MONTHS 6 MONTHS
30 JUNE 2009 31 DEC 2008 30 JUNE 2008
SALES
HCC coal tonnes 103 035 661 444 198 086
HPS coal tonnes 218 683 1 140 542 589 329
Coal fines 79 396 145 000 74 977
Total coal sales 401 114 1 946 986 862 392
Coke tonnes 15 114 111 748 72 494
Coke oven gas Nm3 - - -
ABRIDGED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
For the six months ended 30 June 2009
6 MONTHS
30 JUNE 2009
USD
Sales revenue 23 616 727
Profit from operations 1 503 739
Finance costs (798 381)
Share of loss of equity accounted investments ( 15 597)
Profit before taxation 689 761
Taxation 969 202
Profit after taxation 1 658 963
Other comprehensive income:
Other comprehensive income net of tax -
TOTAL COMPREHENSIVE INCOME FOR THE HALF YEAR 1 658 963
Basic earnings and
headline earnings per
share 0.01
ABRIDGED STATEMENT OF FINANCIAL POSITION
As at 30 June 2009
6 MONTHS
30 JUNE 2009
USD
Non- current assets
Property, plant and equipment 72 225 542
Investment property 3 615 000
Investments in associates 1 797 827
77 638 369
Current assets
Pre-stripped overburden 1 197 186
Inventory 16 102 744
Trade and other receivables 6 910 311
Financial assets at fair value 2 851
through profit and loss
Bank and cash balances 698 777
24 911 869
102 550 238
Equity and Liabilities
Share capital 44 448 750
Revenue reserves 1 658 963
46 107 713
Non-current liabilities
Deferred tax 10 326 654
Current liabilities
Trade and other payables 22 869 242
Outstanding loans 23 246 629
46 115 871
Long Term Liabilities
102 550 238
ABRIDGED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2009
Equity and
reserves
USD
Share capital 44 448 750
Total comprehensive income for the half year 1 658 963
Balance as at 30 June 2009 46 107 713
Zimbabwe
30 September 2009
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 30/09/2009 07:10:02 Produced by the JSE SENS Department.
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