Troubled Zimbabwe Stock Exchange-listed coal mining entity, Hwange Colliery Company Limited (HCCL) recorded a reduced net loss for the first quarter to March 2020 compared to the same period last year.
Net loss for the period amounted to $64 million down 65 percent from a loss of $181 million prior year comparative.
The sharp decline in trading loss comes at a time when the coal miner continues its quest towards revival having been placed under reconstruction.
In a trading update for the first quarter to March 31, 2020, HCCL notes positive progress in its business, which is even more pronounced due to the drawbacks most businesses have encountered due to the Covid-19 global pandemic.
The period also saw a 50 percent jump in production to 175,849 tonnes compared to the same period in the preceding year.
“In spite of the challenging operating environment, the company recorded increase in production volumes by 50 percent, gross profit percent increase of 22 percent and net loss decrease of 65 percent for the 3 months ended 31 March 2020 compared to the corresponding period in 2019,” advised HCCL.
“The sales volumes, however, decreased by 33 percent for the same period,” said the coal miner.
With Government already having spelt out economic revival interventions post the Covid-19 period, HCCL is hopeful over the country’s economy outlook.
The company is also anticipating improvement of sales as most of its clients have reopened pursuant to the country’s lockdown having moved to Level 2.
“As a provider of coal, which is essential in the provision of electricity to the nation, as well as for processes for manufacturers, who are currently reopened for production, HCCL’s domestic market, which was the target portion of its client base remains in place and so business remains assured,” said HCCL.
“In spite of the challenges, the company has ensured continued production in order to meet customer requirements and ensure business continuity.”
Hwange is this year targeting to double production from an average of about 35 000 tonnes per month.
The target is largely anchored on the development of a second underground mining section from the current one and is also pushing to increase high value coking coal in the production mix so as to widen the profit margin.