Ichor Coal NV has published its 1H15 results for the interim financial period:
- Revenue showed a y/y 13% decrease to €22.7 million due largely to the 25% y/y drop in the export coal price and a fall in overall sales.
- Cost of sales increased from €17.9 million to €19.2 million on the back of the strengthening of the rand against the euro. However, on a rand basis, the cost of sales decreased by 3% y/y, and as a result, gross profit declined from €8.2 million to €3.5 million.
- The negative trend in the results drivers was partially offset by a foreign exchange translation gain resulting from the appreciation of the rand/euro exchange rate. The net result showed a y/y decrease in EBITDA to €3.1 million from €4.6 million.
- The group's equity position continues to improve: the debt-to-equity ratio improved to 164 from 175, and in June the outstanding corporate bonds were redeemed. This together with the change in fair value of the convertible bonds had a positive effect on the liability section of the balance sheet.
IchorCoal CEO, Nonkululeko Nyembezi-Heita, commented: "Conditions in the commodities sector remained extremely challenging, with a further deterioration in commodity prices across the board. This presented a tougher than forecast operating environment, with an average 8% decline in international thermal coal spot prices over the six months and 18% y/y. This presented a considerable challenge to the coal sector as a whole and consequently, a disappointing first half. That said, over the reporting period we took major steps forward in the execution of our strategy towards our goal of becoming the leading mid-tier thermal coal producer in South Africa.”
"On the organic front, Mbuyelo Coal's flagship project - Manungu - produced first coal in June and is well on the way to achieving its ramp-up targets. Vunene made good progress on the refurbishment of the infrastructure to restart underground mining operations, which will underpin production for at least the next 20 years. We are very well positioned to benefit from any uptick in coal prices as and when it occurs,” continued Nyembezi-Heita.
Located in Mpumalanga province, the Manungu project has a 460 million t resource base and a long-term coal supply agreement with Eskom. The mine will initially supply 1.6 million tpy to Eskom, ramping up to 3 million tpy from the fourth year onwards.
Edited from press release by Angharad Lock
Read the article online at: https://www.worldcoal.com/coal/05102015/ichor-coal-nvs-1h15-results-2959/