Hwange in hefty $115 million loss

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Text of Hwange in hefty $115 million loss

  • BH24 Reporter

    HARARE Struggling coal miner Hwange Colliery Com-pany has reported a substan-tial loss of $115 million for the year ended December 31, 2015 from the loss of $37,8 million in FY2015.

    Although the coal-miner experienced a notable decline in revenue s during the period under review, its loss position was particu-larly deepened by a six-year liability to the Zimbabwe Revenue Authority (ZIMRA) and a significant bump in administrative costs.

    The widening of the loss is mainly attributed to the recognition of the $69,1 mil-

    lion ZIMRA liability covering the six-year period 2009 to

    2015. An amount of $40,6 million had been accrued

    resulting in an adjustment of $28,5 million after the

    News Update as @ 1530 hours, Friday 01 April 2016

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    Hwange posts hefty $115 million loss

  • conclusion of the ZIMRA verification exercise, said acting chairman Mr Jemister Chininga in a statement accompanying the results.

    There was also a $118 increase in administrative costs mainly attributable to the adjustment for the ZIMRA liability, he added.

    Administrative costs for the period at $60,6 million was also higher than $27,8 mil-lion prior year.

    Cost of sales of $101,3 mil-lion was much higher than the revenue of $67,5 million prior year.

    Hwange Collierys current lia-bilities amounted to $287,3 million during the period under review compared to $209,8 million in 2014.

    Management said although some of its creditors have taken legal action against the firm, efforts are being made to contain the negative

    effects of such a move.

    Borrowings increased from $11,9 million to $51,1 mil-lion.

    Going forward, the company expects a $7,5 million coal pre-financing facility to give impetus the new business

    plan. The company is tar-geting monthly production targets of 350 000 tonnes from July 2016.

    Basic loss per share amounted to 0,63 cents up from a loss of 0,21 cents prior year.

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  • BH24 Reporter

    HARARE -Listed hotelier group African Sun posted a loss after tax of $8, 3 million in the 15-month period to December 31, 2015 as revenues during the period slid.

    The low revenue performance was attributed to the broader negative performance within the countrys tourism sector.

    The South African market which contributes significantly to Zimbabwe tourist arrivals has suffered from the depreci-ation of the South African rand making Zimbabwe an expensive destination, said chairman Mr Herbert Nkala in a statement accompanying the results.

    African Sun shifted its financial year end from September to December 31 to align it with that of its major shareholder - Brainworks Capital. In the previous period, it had reported a $2, 2 million loss in the year to September 30, 2014.

    For the year just ended, the groups total revenue stood at $63, 1 million.

    On a like for like, revenue decreased by 8 percent as the group experienced noticeable decline in the average monthly revenues during the period under review, said the com-pany. Income per available room dropped from $47 to $45, how-ever occupancy levels jumped marginally from 48 percent to 49 percent. Operating expenses stood at $43,4 million, rising from $33 million in the prior 12-month period. African Sun currently operates 11 hotels in Zimbabwe.

    And in October last year, the group appointed Legacy Group of hotels to manage five of its hotels Elephant Hills, Trout-beck, Hwange Safari Lodge, The Kingdom and Monomotopa Hotel.

    At the same time (2015), the group brought to an end their regional operations in Ghana,

    South Africa, Mauritius and Nigeria. Management said the regional operations were weigh-ing heavy on the local unit, which was profitable. During the period under review, the group reduced staff compliment by 20 percent to 1 179, a move they anticipate will yield annual sav-ings of at least $2, 7 million.

    Finance costs fell by 16 percent to $2, 5 million as the group managed to reduce borrowings from $17, 3 million to $7, 7 million. Earnings Before Income Tax Depreciation and Amorti-sation (EBITDA) amounted to $7 million compared to $8,3 million in the previous 12 month period.

    Going forward, the chairman said the group will maintain implementing the new business model as well reducing cost of sales and overheads, as well as driving volume growth.

    The board has resolved not to declare a dividend for the year ended.

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    African sun reports $8,3m loss

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  • HARARE Revenues from fixed telephony increased by 14,2 percent to $35 million during the last quarter of 2015 despite a decrease in investment on infrastructure, latest statistics from the Postal and Telecommunica-tions Regulatory Authority of Zimbabwe (Potraz) show.

    Potraz attributed the per-formance to an increase in international incoming traffic and net on net traffic.

    Revenues registered from fixed voice service increased by 14,2 percent to reach $35,3 million from $30,9 mil-lion recorded in the previous quarter, it said.

    On the other hand invest-ment declined by 61,1 percent to $1,7 million from $4,6 million invested in the previous quarter. The bulk of investment was in the access network.

    Potraz said subscribers to

    fixed telephony services also increased during the quarter under review.

    The increase in fixed teleph-ony subscriptions was driven by improved demand for Asymmetric Digital Sub-scriber Line (ADSL) services.

    ADSL is a communications technology used for connect-ing to the Internet using a fixed telephone line.

    The total number of active fixed telephone lines increased by 0,5 percent to reach 333 702 from 332 211

    recorded in the third quarter of 2015.

    Household subscriptions constituted 71,3 percent of the total fixed subscriptions whereas corporate subscrip-tions made up 28,7 percent of total fixed network sub-scriptions, the report shows.

    Active rural lines increased by 4,3 percent to record 8 998 from 8 629 lines recorded in the previous quarter.

    On the other hand active urban lines increased from 323 582 to 323 704 recorded in the previous quarter.

    Companies that offer fixed telephony services in Zim-babwe include TelOne and Africom, but these have failed to add more people to their networks mainly due to stiff competition from mobile phone companies.

    -New Ziana.

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    Fixed telephony revenue increases

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  • HARARENational Railways of Zimbabwe (NRZ) workers have gone on strike to push their employer to pay them 14 months salary arrears.

    NRZ public relations manager Fanuel Masikati told New Ziana the workers downed tools on Monday.

    The workers are on indus-trial action over the issue of salary arrears. As you may know NRZ owe them over 14 months salary, he said.

    He said the parastatal would pay workers when funds become available.

    The focus is to make sure that we pay them something for now. As you know NRZ is in the business of moving goods but due to the shrink-ing customer base, we have been unable to meet salary obligations, he said.

    The workers are on record saying NRZ has for some time been paying them 20 percent of their salaries.

    Last year, NRZ workers demonstrated at the parast-al's headquarters in Bula-wayo over the issue, and Transport and Infrastructural

    Development Minister Joram Gumbo intervened by order-ing the board and manage-ment to look for funds to pay employees.

    The decline in business has paralysed operations of the rail util ity over the years.

    NRZ is moving an average of three million tonnes of cargo annually compared to 12 mil-lion tonnes in 1992 and 19 million tonnes in 1997.

    At least 93 percent of its revenue used to come from freight services.

    NRZ is also reeling from a debt of over $30 million, while parastatals such as the Grain Marketing Board (GMB) and Ziscosteel owe NRZ $7 million and $9 million respectively.

    The parastatal has been struggling to attract new investors since the turn of the millennium.

    According to a study done by a Canadian consultancy firm in 2012, NRZ requires $1,9 bill ion for recapitalisa-tion.-New Ziana

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    NRZ workers on industrial action over 14 months salary arrears

  • HARARE -The equit ies mar-ket extended yesterdays gains into the new month, after the mainstream indus-tr ia l index gained a further 0.19 to c lose at 97.80.

    A couple of heavyweights l i f ted the performance with te lecoms giant Econet add-ing $0,0057 to trade at $0,2500, whi le beverages giant Delta rose by $0,0025 to $0,5650 and giant retai ler OK Zim increased by $0,0017 to sett le at $0,0367.

    FBCH was also up, r is ing by a marginal $0,0004 to c lose at $0,0604.

    On the downside, BAT shed $0,0480 to trade at $10,7500 and Hippo eased $0,0191 to $0,2509.

    Other losses were seen in Padenga, which lost $0,0009 to c lose at $0,0701, Inn-scor retreated $0,0003 to $0,1870 and Pear l Proper-t ies inched down $0,0001 to

    c lose at $0,0220.

    The mining index was f lat

    at 19.53 as a l l the mining counters maintained previ-ous pr ice levels.

    .- BH24 Reporter


    Equities market extend gains


    Name Change% PriCe today HIPPO -7.07 25.09

    OK ZI