South African-focused coal company, Universal Coal, has announced a post-tax profit of AUS$17.6 million in the six months to 31 December, according to the company’s interim financial report. This compares to an AUS$4.1 million loss over the same period in 2014.
The company’s operating profit was AUS$6.6 million, “a substantial imrovement on the corresponding interim loss of AUS$2 million,” said Universals Chairman, John Hopkins OAM. Despite this, the company was “slightly disappointed” that results were lower than anticipated “due to the lower production at the company’s Kangala Colliery, following the pit reconfiguration”.
After translating foreign operations and accounting for the effects of exchange rate difference, the company has “reflected a comprehensive loss after tax of AUS$4.5 million,” continued Hopkins. “This is after posting a negative effect of translation of foreign operations of AUS$22.2 million as a result of a 21% devaluation in the South African rand, which is the functional currency of the underlying business subsidiaries.”
The company’s focus is now on returning its Kanala mine to steady-state production, while also bringing its NCC asset into production. Both of these aims are expected to be realised in 2H16.
“While we are disappointed by delays to the re-commissioning process [at NCC], we believe that these will soon be overcome, providing a substantial boost to group production, earnings and cashflow for years to come,” said Hopkins.
Universal is currently under offer from Coal of Africa (CoAL) with 53.2% of its shareholders approving CoAL’s offer as of 3 March. The offer deadline is 15 April.
Edited by Jonathan Rowland.