’The strategic transition of the business and delivery in a tough environment has been a key focus of the year. I am pleased to report as Chairman of Wescoal for the eighth year that under this umbrella the group has once again delivered satisfactory results’ – Chairman Robinson Ramaite.
Wescoal Holdings Limited produced satisfactory results for its 2015 financial year with the key focus on the strategic transition of the business and delivery to all stakeholders in a tough environment according to Chairman Robinson Ramaite commenting on the Group’s 2015 Integrated Annual Report."The Group’s revenue has increased 0.19% to R557.3 million and the margin increases from 13.5% to 17.5%," he says.
“I am pleased to report a continued profitable position for Wescoal with a further improvement in headline earnings to stock holders with the Group’s revenue increasing 0.19% to R557.3 million and the margin moving from 13.5% to 17.5%. The board took a decision not to declare a final dividend, opting to use the available cash to develop its mining assets such as the Elandspruit project which at the time of writing has the mine feeding the new Wescoal Processing Plant with the expectations of reaching the target of 170 000 Run of Mine (ROM) tons per month before the end of the calendar year
Revenues from the mining division are R557.3 million (2014: R556.2 million) with an operational EBITDA of R94.7 million (2014: R101.2 million).
Wescoal’s trading division’s performance was highlighted by excellent cash generation in a challenging business environment. Its revenues where the Macphail takeover, consolidation and rationalisation has been completed are significantly higher at R1.16 billion (2014: R591.2 million) with operational EBITDA improving considerably to R34.3 million (2014: R1.6 million).
“However, direct comparisons to the previous year’s figures are difficult because only four months of MacPhail’s results were reported and there was a R75-million sale of the Vlaklaagte asset. There were also exceptional and non-reoccurring costs including the resignation of CEO Andre Boje, a year earlier than expected,” he says.
The final results for the 2015 financial year reflects a solid performance for most of the period under consideration in challenging business environment and delays in securing long-term coal supply contracts. On the positive side there has been an asset base increase and the company has secured extension of existing life of mines and made a significant investment in Elandspruit.
“We are proud to report an improved safety record with no lost-time accidents and the doubling of our Corporate Social Investment,” Robinson says.
“The main business of the Group is the mining, processing and the sale and supply of coal. We mine, source and supply to end users including power generation, manufacturing and petro-chemicals sectors. The key strategic thrust of Wescoal is to be a leading coal miner with a sustainable resource base and a coal trading operation.
“To achieve this, among other objectives, during the calendar year we will have in place a revitalised executive team including appointments in the HR, Legal and financial departments while continuing with our strategy to position the company as an employer of choice,” he points out.
“Looking ahead, management envisages that the coming 12 months will be challenging as competition increases, load shedding impacts the business and the state of the steel sector in South Africa comes under pressure with already reduced orders for coal being experienced.
“Wescoal Mining is evolving the long-term strategy around the Eskom requirements of 50%+ HDSA ownership to ensure finalization of long-term coal supply contracts. Management remains cognizant of the fact that that currently 80% of Wescoal reserves are of the Eskom-type of resource and therefore holds the view that most of Wescoal’s business will continue to be built around Eskom.
“Additional avenues of coal supply are being explored as part of an assessment of the businesses long-term strategy and risk management,” Ramaite concludes
Wescoal Holdings Limited mines, processes, supplies, sells and distributes coal. It is listed on the main board of the JSE and its key strategic thrust is to be a leading junior coal miner with a sustainable resource base and a coal trading operation
Wescoal Holdings Ltd