|
Wankie Colliery Company Limited -
Wankie Colliery Company Limited
(Incorporated in Zimbabwe)
Unaudited Financial Results for the Six Months ended 30 June 2003
STATEMENT TO SHAREHOLDERS
The company"s unaudited results for the six months ended 30 June 2003 with
appropriate comparisons for the previous periods were as follows:
6 Months 6 Months Year
ended ended ended
30 .6. 03 30 .6. 02 31 .12. 02
SALES
WCC coal tonnes 457,553 696,400 1,241,511
HPS coal tonnes 856,584 1,202,250 2,207,089
Total coal sales 1,314,137 1,898,650 3,448,600
Coke tonnes 96,702 111,441 224,111
Coke oven gas Nm3 3,030,190 12,649,360 24,260,240
CURRENT COST HISTORICAL COST
6 Months 6 Months Year 6 Months 6 Months Year
ended ended ended ended ended ended
30 .6. 03 30 .6. 02 31 .12. 02 30 .6. 03 30 .6. 02 31 .12. 02
INCOME
STATEMENT $000 $000 $000 $000 $000 $000
Sales
Reve
nue 12,323,770 20,672,246 34,725,197 8,919,397 3,858,150 8,434,407
(Loss)
/profit
before
inte
rest (10,646,203) (5,579,710) (20,907,858) 921,261 163,121 33,810
Monetary
adjust
ment (3,983,362) 449,348 (3,447,368) 0 0 0
(6,662,841) (6,029,058) (17,460,490) 921,261 163,121 33,810
Net
inte
rest (198,032) 778,943 1,619,753 (191,526) 152,083 434,128
Profit
before
taxa
tion (6,860,873) (5,250,115) (15,840,737) 729,735 315,204 467,938
Taxa
tion 1,289,949 (250,778) 3,499,205 (109,977) (53,985) (144,438)
Profit
after
taxa
tion (5,570,924) (5,500,893) (12,341,532) 619,758 261,219 323,500
Cents Cents Cents Cents Cents Cents
Earni
ngs
per
share (3,274) (3,241) (7,267) 364 154 190
6 Months 6 Months Year 6 Months 6 Months Year
ended ended ended ended ended ended
30 .6. 03 30 .6. 02 31 .12. 02 30 .6. 03 30 .6. 02 31 .12. 02
ABRIDGED BALANCE
SHEET $000 $000 $000 $000 $000 $000
Capital
employed:
Share
capital 170,133 169,723 169,823 170,133 169,723 169,823
Reserves and
retained
profits 50,652,454 63,061,664 56,222,136 2,453,105 1,769,873 1,832,503
Shareholder
equity 50,822,587 63,231,387 56,391,959 2,623,238 1,939,596 2,002,326
Deferred
taxation 16,129,979 21,268,342 17,529,904 554,369 519,330 554,369
Loans 4,491,200 3,489,838 271,167 4,491,200 751,252 124,000
71,443,766 87,989,567 74,193,030 7,668,807 3,210,178 2,680,695
Represented by:
Fixed
assets
and
invest
ments 62,811,739 75,632,274 66,387,466 2,454,782 2,117,989 1,731,612
Current
assets 16,911,883 29,613,623 17,001,754 13,493,881 4,806,932 5,130,340
Current
liabi
lities 13,588,437 17,893,907 9,314,731 13,588,437 3,851,993 4,259,464
Net current
assets 3,323,446 11,719,716 7,687,023 (94,556) 954,939 870,876
Deferred
foreign
currency
diffe
rences 5,308,581 637,577 118,541 5,308,581 137,250 78,207
71,443,766 87,989,567 74,193,030 7,668,807 3,210,178 2,680,695
ABRIDGED CASHFLOW STATEMENT
CURRENT COST HISTORICAL COST
6 Months 6 Months Year 6 Months 6 Months Year
ended ended ended ended ended ended
30 .6. 03 30 .6. 02 31 .12. 02 30 .6. 03 30 .6. 02 31 .12. 02
$000 $000 $000 $000 $000 $000
Cash flows from
operating
activities
Operating
cash
flow (6,662,841) (6,029,058) (17,460,490) 921,261 163,121 33,810
Depreciation and
other non cash
items 7,354,130 9,166,018 11,325,383 3,403,992 190,053 225,692
Operating cashflow
before
invest
ment 691,289 3,136,960 (6,135,106) 4,325,253 353,174 259,502
in working
capital
Net movement
in working
capital 3,103,685 (1,415,878) 4,007,893 (2,336,498) (691,963) (1,107,719)
Net financing
costs
paid (198,031) 778,943 1,619,753 (191,527 152,082 434,128
Taxes
paid (37,090) (273,441) (217,990) (15,599) (38,289) (54,649)
3,559,853 2,226,584 (725,451) 1,781,629 (224,996) (468,738)
Cash flows from
investing activities
Net cash flow
related to
fixed
assets (1,835,592) (2,717,050) (905,394) (799,024) (510,723) (239,191)
Net cashflow
before
financing
activi
ties 1,724,261 (490,466) (1,630,845) 982,605 (735,719) (707,929)
Cash flows from
financing activities
Net loans
raised 4,231,535 617,194 2,604,863 4,231,535 617,194 441,072
Net cash
inflow/
(out
flow) 5,955,796 126,728 974,019 5,214,140 (118,525) (266,857)
Overdraft and
acceptances
less bank
cash balances
31
December
2002 (1,366,560) (2,340,579) (2,340,578) (624,904) (358,047) (358,047)
30
June
2003 4,589,236 (2,213,851) (1,366,559) 4,589,236 (476,572) (624,904)
5,955,796 126,728 974,019 5,214,140 -118,525 (266,857)
Statement of changes in equity - Current Cost
for the year ended 30 June 2003
Share capital Capital General Retained Total
reserves reserve profit
$000 $000 $000 $000 $000
Balances at 1 January
2003 72,302,810 36,257,257 61,551,397 (113,719,506)56,391,958
Net profit for
the
year (5,570,924) (5,570,924)
Transfer to
capital reserves
Transfer to general reserve
Issue of share capital
under the share
option
scheme 418 418
Adjustment to
share capital 1,134 1,134
Balances
at 30
June
2003 72,303,228 36,257,257 61,552,531 (119,290,430) 50,822,586
Statement of changes in equity - Historical Cost
for the year ended 30 June 2003
Share capital Capital General Retained Total
reserves reserve profit
$000 $000 $000 $000 $000
Balances at 1
January
2003 169,823 733,018 1,092,000 7,486 2,002,327
Net
profit for
the
year 619,758 619,758
Transfer to capital reserves
Transfer to general reserve
Issue of share capital
under the share
option
scheme 310 843 1,153
Balances at 30
June
2003 170,133 733,861 1,092,000 627,244 2,623,238
INTRODUCTION
The past six months continued to experience a decline in economic activity
with annual inflation reaching a record level of 365% as at 30 June 2003.
Foreign currency shortages, increase in borrowing cost, price controls,
transport constraints and the devaluation of the Zimbabwean dollar against
major currencies, affected the company"s operations.
TRADING PERFORMANCE
Demand for coal and coke remained firm throughout the period for both the
domestic and export markets. Total coal sales for the six months period
under review declined by 31% to 1 314 137 tonnes compared to 1 898 650
tonnes achieved during the same period last year. Of the total coal sales,
4% or 51587 tonnes were sold to the export market.
WCC coal
WCC coal sales were 457 553 tonnes and were 34% below the 696 400 tonnes
sold in the first six months of the previous year. During the first six
months of the year, the company"s production capacity declined to an
average of 50% because of the shortage of maintenance spare parts and
major components for the coal mining and processing equipment. The shortage
of these spares was mainly attributed to a combination of unavailability of
foreign currency and cashflow constraints against suppliers" demand for
cash upfront on spares ordered. Despite capacity constraints, the
transportation logistics continued to be a major problem. NRZ continued to
supply inadequate wagons. This has necessitated the company to place more
emphasis on road transportation in order to move coal to the market.
HPS coal
HPS coal sales volume at 856 584 tonnes was 29% below volume sales for the
same period last year of 1 202 250 tonnes. This was due to low plant and
equipment availability at the opencast mine. Intermittent production
stoppages and breakdowns were caused by foreign spares unavailability
coupled with the shortage of diesel.
Coke
Coke sales decreased by 13% from 111 441 tonnes to 96 702 for the
comparative six months periods ended 30 June 2002 and 2003 respectively.
Exports for the period were 52 040 tonnes and accounted for 54% of coke
sales. The toll coking agreement with ZISCO to utilise its excess coke oven
capacity yielded limited benefits because of the production capacity
problems at the Colliery and transportation constraints to move coking coal
from Hwange to Redcliff.
Gas
There was a major decline in the supply of coke oven gas to the Hwange
Power Station from 12 649 360 normal cubic metres (Nm3) recorded last
year, to 3 030 190Nm3 supplied during the first half of this year. Revenue
earned from gas normally contributes about 5% of total sales, and for the
period under review only accounted for 2%. This negative performance was
caused by unavailability of imported compressor spares and supply stoppages
to allow for major maintenance work on the gas pipeline. Gas is a by-
product and the significant drop in volumes had little impact on the
business.
FINANCIAL RESULTS
The unaudited accounts were prepared in compliance with International
Accounting Standard (IAS) 29 (Financial Reporting in Hyperinflationary
Economies). The Financial Statements and the corresponding comparative
figures have been restated based on the consumer price index (CPI) of
7 631.40 as at 30 June 2003. The following comments on the financial
statements are based on current cost (inflation adjusted) figures.
Income Statement
Turnover decreased by 30% to $12 323 770 000 for the first six months of
the year. Last year turnover for the half year was $20 672 246 000. This
was attributed to the price freezes which were effected in November 2002
coupled with a 31% decline in sales tonnage. This impacted negatively on
company cashflows and profitability during the period under review. The
prices of coal and coke were reviewed in May 2003 and are now under a
price monitoring system.
The operating loss for the period was $10 646 203 000. This was $5 066 493
000 or 90% more than the operating loss of $5 579 710 000 incurred in the
first half of 2002. This was attributed to the untenable position the
company found itself in, whereby, its prices were controlled yet suppliers"
prices were not controlled. Furthermore critical and maintenance spares
sourced from local suppliers were priced on the basis of parallel market
exchange rates. Despite operating at 50% capacity, by nature of its
business, WCC incurred fixed costs levels similar to normal capacity. Also
inflation pushed up the local input costs. The overall effect eroded the
margins and consequently profitability.
The increases in the minimum bank lending rates adversely affected the
company resulting in net finance costs of $198 032 000. Against a net
finance income of $778 943 000 recorded in the same period last year.
Loss after taxation of $5 570 924 000 was $70 031 000 or 1% more than
$5 500 893 000, the loss incurred for the same period the previous year.
Balance Sheet
Fixed assets and investments at $62 811 739 000 were $12 820 835 000 or
17% lower than the same period last year. This decline was caused by the
relatively high depreciation charge, which is based on inflation adjusted
asset values.
The long term loans at $4 491 200 000 were $1 001 362 000 or 29% more than
the loan balance of $3 489 838 000 for the same period last year. The
company was not able to fully service the offshore loans due to shortages
of foreign currency. This was coupled with the devaluation of the
Zimbabwean dollar by 1 398%.
The ZISCO debt as at 30 June 2003 amounted to $1 602 117 848. The
government has undertaken to provide funds to ZISCO to enable the
liquidation of the debt before the end of the year.
OUTLOOK
The shortage of foreign currency to import critical spares will still be a
major challenge in terms of ensuring efficiency in running the operations.
A US$5,3 million loan facility was made available in June 2003. This is
expected to bring relief in terms of equipment refurbishment, and
production capacity is expected to be restored to the normal minimum of
80%. The positive impact is likely to be realised as from September 2003.
The demand for coal and coke products is expected to remain firm in both
the domestic and export markets.
The coal and coke prices were increased in May 2003 and a further review
was made in July 2003.
The company has engaged all stakeholders in order to resolve the coal
transportation problems being experienced by NRZ. In the meantime
customers would be encouraged to continue to use road freight.
The NEC recently awarded a 30% cost of living adjustment effective 1 July
2003 and a further 20% in September 2003 for NEC graded employees. Whilst
this development will bring relief to our employees under this high
inflationary environment, it has an adverse impact on the company"s
cashflows.
DIVIDEND
In light of the difficult economic environment, the cashflow position and
the magnitude of losses incurred, the company is not declaring any interim
dividend.
DIRECTORATE
At the Annual General Meeting of shareholders held on 27 June 2003, a new
board was elected comprising; Messrs J Nqindi, N Nyandoro, W A Mubaiwa, J
Goromonzi, M T A Mutezo, T Kwashirai, F Chasi, S Gula-Ndebele, G S Mlilo
and Dr M Ncube.
By Order of the Board
T K NCUBE
COMPANY SECRETARY
Date: 18/09/2003 09:45:15 AM Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
