Minergy coal limited has made a net loss of approximately thirteen million pula (P13 million) compared to net loss incurred the previous year. This is despite the fact that the company recorded increased revenue and reduced operational expenditure costs.
Minergy is a coal mining and trading company committed to becoming the supplier of choice to industrial customers and power utilities across southern Africa. Minergy is 100% owned Masama Mine, located in the Mmamabula Coalfield of Botswana.
According to the company’s condensed unaudited interim consolidated financial results of the year ended in December 2020, the company made a loss due to a number of reasons.
Sales volumes for the interm year ended in December 2020 amounted to ~175 000t compared to ~85 000t recorded in 2019 same time. This was attributable to increased sales in July and August 2020. “This also coincided with the official opening of the rail siding and Minergy successfully sending product via rail to South Africa.”
However, the loss that was incurred was due to: depletion of stockpiles; reduced pre-stripping of overburden to expose coal, resulting from a reduction in contractor operations due to funding delays; excessive rain hampering the evacuation of coal by road from October 2020; and COVID-19 (Corona Virus Disease) related delays at borders.
Moreover, Cost of sales increased to hudred and nineteen point four million pula (P119.4 million) compared to sixty-nine point four million (P69.4 million) in 2019.This resulted in a gross loss of P43.6 million for the reporting period. In 2019 thirty point four million (P30.4 million) was recorded.
Meanwhile, Operating expenditure was at eleven point five million (P11.5 million) during the interim period (December 2020) compared to sixteen point five million pula (P16.5 million) in the comparative six-month period (December 2019). This was five million pula (P5 million) lower, and was attributable to: cost containment initiatives implemented, which included a hold on salary increases, a reduction in advisory fees and renegotiation of costs with service providers where possible; expenditure related to pursuing a second listing on the Alternative Investment Market (AIM) of the London Stock Exchange and expenditure on road and community related infrastructure, neither of which were incurred in the reporting period.
Looking into the future, the company expects increased coal prices. This is after a seventy percent (70%) increase which was recorded in December 2020. “The sudden increase is driven by strong demand from India and the spill-over of China’s ban on Australian coal.” The current price of $80 (P800) per tonne may remain stable with a slight downward adjustment of $75 (P750) per tonne in the first quarter of 2021.