Hwange H1 losses widen, firm faces up to $40mln in lawsuit losses

Hwange H1 losses widen, firm faces up to $40mln in lawsuit losses

HARARE, September 30 (The Source) – Struggling coal miner Hwange Colliery Company (HCC) widened its half year losses by more than 90 percent to $15,6 million as sales plummeted, the company reported on Wednesday.

Coal and coke sales were down 10 percent to 685,759 tonnes during the period under review resulting in an 11 percent decline in revenue to $35,3 million.

Finance costs were flat on last year’s amount of $1,1 million.

Operating loss was $19,5 million from $7,6 million in the comparative prior period.

“The burden of servicing legacy debts continued to strain the company’s cash flows and this presented working capital challenges…The board and management are diligently sourcing working capital from local money market to inject into operations,” said board chair Farai Mutamangira in a statement accompanying the results in Wednesday.

The company said it is engaged with government over conversion of a $5 million tax liability to equity, which will be structured through a fully underwritten rights issue and private placement.

The company had litigation brought against it amounting to $40,7 million.

Cases worth $20,1 million have been awarded against the company while the rest are still pending.

Headline loss per share more than doubled to 0,09 cents.