JSE-listed Wescoal Holdings reported improved results for the six months ended September 30.

Despite the impact of the ongoing Covid-19 pandemic, the group has generated higher revenue of R2.67-billion, compared with R2.09-billion in the prior interim period, and improved earnings before interest, taxes, depreciation and amortisation (Ebitda) of R416-million.

“The group managed to deliver another consistent production performance . . .. The investment and effort that have been put into stabilising the current operations and the diligence exercised in operationalising our greenfield Moabsvelden project, have put Wescoal on track to produce the eight-million tonnes a year of run-of-mine (RoM) which we have been targeting since 2019.

“As we enter the second half of the financial year, our key focus will be on maintaining profitability to get the group back in the green in full year 2022,” interim CEO Robinson Ramaite says.

Moabsvelden played a pivotal role in the group’s performance for the interim reporting period and its outperformance contributed to the group exceeding the prior year on almost every measure, as well as the five-year high production record.

Wescoal has continued to focus on cost optimisation in the period to ensure that savings projected in cost savings  initiatives implemented in the prior year are sustainable.

The 7% increase in RoM production has also contributed significantly to the dilution of fixed costs across the operations.

The strong performance from the group has resulted in a 658% year-on-year increase in earnings a share to 19.7c.

The board has decided that no interim dividend will be declared. It notes that it remains committed to delivering shareholder value and is prioritising capital allocation to the repayment of debt and ensuring  the completion and ramp up of the development of the Moabsvelden project.

Wescoal is seeking to build on the operational momentum that it gained during the first six months of the financial year by using the healthy stockpiles that have been built up at its operations, to ensure consistent supply to customers during the holiday and rainy season.

Production from the Moabsvelden project is also expected to continue to ramp up as steady-state is reached, supplementing the group’s saleable product.

The group’s new strategic direction to diversify from being a coal-focused mining and trading company, to a broader energy and investment company in the medium to long term is already starting to present opportunities for the group, it posits.

“While the group’s short-term focus remains to sweat its current coal assets and to continue generating solid cash-flows from existing operations, Wescoal will continue to explore opportunities in the renewable space so that it can transition into an investment company with diversified portfolios including energy anchored on its environmental, social and governance strategy,” Ramaite says.