Wescoal Holdings Limited, coal miner, trader, and supplier, has reported that despite the Covid-19 pandemic, the group has generated higher revenue of R2.666-billion (HY21: R2 089-billion) and improved EBITDA of R416-million (HY21: R315-million) in its recently released improved results for the six months ended 30 September 2021, with Moabsvelden playing a pivotal role in the group’s performance.
Interim CEO, Robinson Ramaite, commented, “The investment and effort that have been put into stabilising the current operations and the diligence exercised in operationalising our greenfield Moabsvelden Project, have put Wescoal on track to produce the 8mtpa of run of mine (ROM) which we have been targeting since 2019. As we enter the second half of the financial year, our key focus will be on maintaining profitability to get the group back in the green in FY22.”
Wescoal highlights that Moabsvelden contributed to the group exceeding the prior year on almost every measure as well as the five-year high production record. The EBITDA margin for the period is at 15.6% (HY21: R15.1%) which reflects a 3% improvement. Wescoal has continued to focus on cost optimisation in the period to ensure that savings projected in cost savings initiatives implemented in the prior year are sustainable. The 7% increase in ROM production has also contributed significantly to the dilution of fixed costs across the operations. The strong performance from the group has resulted in a large increase in earnings per share of 658% to 19.7 cents (HY21: 2.6 cents).
Wescoal says it will be using the healthy stockpiles that have been built up at its operations, to ensure consistent supply to customers during the holiday and rainy season. Production from the Moabsvelden project is also expected to continue to ramp up as steady-state is reached, supplementing the group’s saleable product.
Ramaite concluded, “While the group’s short-term focus remains to sweat its current coal assets and to continue generating solid cash-flows from existing operations, Wescoal will continue to explore opportunities in the renewable space so that it can transition into an investment company with diversified portfolios including energy anchored on its environmental, social and governance (ESG) strategy.”