MC Mining reported a rocketing net loss after tax for the year to end-June on Monday, as the company navigates challenges amid fluctuating market conditions.
The company, which develops coking and thermal coal assets, said on Monday revenue fell 18% to $36.7m, primarily due to decreased sales from the Uitkomst Colliery.
Net loss after tax rose 232% to $14.6m (R250m) from the previous year’s loss of $4.4m.
Despite an 11% decrease in the cost of sales gross profit plummeted to zero from $3.6m the year before. Notably, the company recorded an impairment expense of $900,000m related to its Vele Colliery project.
Administrative expenses surged 73% to $15.4m. It was largely driven by a 53% rise in employee expenses, “reflecting the company’s efforts to advance its Makhado steelmaking hard-coking coal project”, the company said.
MC Mining’s key projects include the Uitkomst Colliery, which focuses on metallurgical coal; the Makhado Project, which does hard coking and thermal coal; Vele Colliery, which produces semisoft and thermal coal; and the Greater Soutpansberg Projects producing coking and thermal coal.
The company’s operational performance was mixed, with Uitkomst producing 498,350 tonnes of run-of-mine coal, a 12% increase from the previous year. However, sales volumes were affected by depressed coal prices and logistics costs. The company’s net revenue per tonne decreased to $79, primarily due to sales into the domestic market, whereas coal prices were elevated in the first half of the 2023 financial year.
The company said its flagship Makhado project remained “shovel ready” and is expected to deliver positive returns for shareholders.
“The [Makhado] project has the required regulatory approvals and surface rights over the mining and processing areas, positioning MC Mining as SA’s pre-eminent steelmaking hard coking coal producer,” the company said.
Interim MD and CEO Christine He said the company faced significant challenges in the past year, “but we are committed to delivering value to our shareholders”.
“Our focus remains on advancing the Makhado Project, optimising operations at Uitkomst and Vele, and securing additional funding to support our growth strategy.”
Despite some challenges, the company said it had made big progress in restructuring operations and securing new funding.
Soutpansberg contains more than 7-billion tonnes of inferred coal resources.
“Our funding initiatives are expected to enable MC Mining to move forward with its growth plans and navigate the current challenging market conditions,” the company said.
It expects to conclude its funding initiatives in the second half of 2024.
By the JSE’s close the company’s share price was down 4.89% to R1.75.
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