Wescoal boosts interim profits as new coal mine Moabsvelden steps up production

Wescoal has indicated in a trading statement it will report a much needed boost in profits when it delivers its 2021  interim results on or about December 10 with earnings per share expected to be between 18.3c and 21.6c a share.

That is between 604% and 677% higher than the 2.3c per share earnings reported for the six months to end-September 2020.

The improved profits resulted from the growing contribution from its new Moabsvelden colliery and a “consistent operational performance” from the group’s other mining operations.

The trading statement said group production for the six months to end-September was 7% up on the previous comparable period but sales volumes were 19% higher because of rising sales from Moabsvelden to Eskom plus third-party buy-ins.

The group expects the steady production performance achieved in the first half to continue throughout the full financial year but cautioned production performance would be hit by the rainy season and December festive period.

It commented, “these have historically been difficult for the group and resulted in reduced sales and lower profitability.”

The group added it had “also been looking to mitigate against the risk of reducing Eskom coal offtake by taking advantage of opportunities in the export market where prices recently reached historic highs.”