Zimbabwe coal mining and exploration company Hwange Colliery Company (HCC) recorded a 23% year-on-year decline in revenue for the six months to end June, the company reported last month.

The company’s revenue stood at $18.8-million, which is a substantial decline from the $24.5-million recorded during the same period last year.

However, the company was able to reduce its operating loss to $16.2-million from $25.9-million for the comparative period in the past year.

HCC further noted that, despite a number of one-off costs incurred during the period, its loss after tax narrowed by 5% to $27-million from the $28.5-million loss recorded for the same period in 2016.

The company stated that it had strategically adopted cost-containment measures with the resultant effect of reducing both operating and administrative costs.

Nonetheless, finance costs for the period amounted to $7.2-million, compared with $1.8-million for the same period last year. Total noncurrent assets decreased by 13% to $141.8-million from $162.4-million for the same period in 2016.

HCC’s performance over the past six months fell short of budgetary targets from January to April, owing to low production levels attributable to working capital constraints.

The monthly production average was 94 216 t, which is substantially lower than the budgeted monthly production of 175 425 t. The monthly production for January to April averaged 42 000 t, which the company highlighted as a “significant improvement” in production for the period May to June, which was recorded at 170 000 t and 230 000 t respectively.

Total sales tonnage was 450 557 t, which was less than half the forecast 1.08-millon tons for the period and significantly less than the 585 689 t produced during the same period in 2016.

HCC coal sales during the period increased by 37.5% to 172 573 t from 125 544 t during the same period in 2016.

Sales of coal fines and breeze increased by 13.7% to 47 749 t, from 41 982 t in the comparative period. Coke sales volumes decreased to 7 069 t for the period under review, from 39 842 t of production in the first half of 2016. The company explained that this was attributed to the cancellation of toll coking arrangements.

Meanwhile, HCC pointed out that there was a significant reduction in the cost of sales, which was 51% below the figure recorded for the previous year’s comparable period.

The company explained that this was a function of low sales volumes, which were 135 132 t less than the same period last year, as well as improved production volumes and efficiencies from May, which lowered the unit cost. Cost reduction initiatives also contributed to a lower cost of sales, compared with the previous year’s comparable period.

HCC noted that, while the financial statements still reflected a loss position, they also showed “remarkable progress” in the company’s turnaround programme.

“One of the major objectives of the board during the 2017 financial year is to reverse the gross trading loss position, which has been a feature over the past few years, to a gross trading profit position as a major step to achieve net profitability,” stated HCC.