Hwange Colliery Company Limited (HCCL) failed to meet the coal market demand due to low production according to the company’s Administrator Bekitemba Moyo.
The administrator says Hwange Colliery’s financial performance was poor against the comparable period in 2017.
“The company’s performance for the period under review also fell short of budgetary targets,” Moyo says. “This was due to low production levels attributable to working capital constraints.”
“Monthly production average was 150,000 tonnes compared to the budgeted monthly production of
300,000 tonnes. As a result, the Company failed to meet the market demand.”
HCCL’s gross loss increased to US$3 396 216 in 2018 an increase from US41 347 799 incurred in 2017 according to the Audited Abridged Financial Results For the Year ended 31 December 2018.
“The loss for the year increased by 79% from US$43.8million recorded in 2017 to US$78.4million during the year under review,” Moyo says.
“Total sales tonnage was 1,522,209 tonnes against a budget of 3,541,860 compared to 1,288,485 and
3,607,799 respectively recorded in 2017.”
“Cost of sales increased by 36% as a result of increased input cost which was driven by the parallel market exchange rate that was being used by most suppliers to charge their products in RTGS,” Moyo says.
HCCL, which performed poorly however increased production and sales volumes mainly as a result of the impairment of some assets as well as subdued coal prices against increased input costs.
“As demonstrated by the improved sales and production volumes, there are signs of recovery despite the widening of the loss position which was mainly a result of impairment of assets and stripping activity
assets written off which contributed about $27m,” Moyo says.