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As operational performance improves, Wescoal expects to report a 552 percent increase in interim headline earnings per share.
The junior coal miner said on Wednesday that it is finalizing its results for the six months ended 30 September 2021 and expects headline earnings per share to be between 19.3 and 21.5 cents a share – a 485 percent to 552 percent increase from the 3.3 cents per share for the same period last year.
Earnings per share will range between 18.3 and 20.2 cents, representing a 604 to 677 percent increase over the 2.6 cents reported previously.
Wescoal stated the higher contribution from its new, huge Moabsvelden mine offset lower production from its other businesses, resulting in greater group profitability.
The project generated about 24% of the group’s total run-of-mine production for the half year while still in the box cut construction phase, which is nearing completion.
Wesocal was also able to sustain a positive cash generation from operations, with ebitda estimated to be between R400 million and R425 million, up from R315 million in the previous period.
Mining sales volumes were 19 percent higher than in the previous quarter, mainly to a considerable increase in sales from its Neosho subsidiary to Eskom’s Kusile power station, which is made up of Moabsvelden’s own sales and third-party buy-ins.
The trading business saw sales volumes increase by more than 27% but revenue in this division was just 8% higher because of pricing pressure in the domestic market, Wescoal said.
“The profitability of the group continues to improve driven by steady production from the mining operations, and Wescoal is looking to build on this momentum in the second half of the financial year,” the company said in a statement.
“This is despite demand from Eskom still not recovering to pre-Covid levels. The group has also been looking to mitigate against the risk of reducing Eskom coal offtake by taking advantage of opportunities in the export market where prices recently reached historic highs.”
Story by : Norvisi Mawunyegah