30th Sep 2019 09:08
(Alliance News) - MC Mining Ltd on Monday said its loss narrowed in the first half of 2019, but revenue declined on reduced production volumes.
The thermal and coking coal producer said its loss narrowed in the six months to the end of June to USD33.5 million from USD97.0 million reported a year earlier, as net impairment charges were reduced to USD21.9 million from USD87.5 million.
During the first half, MC Mining said it assessed the carrying value of the Makhado hard coking coal project, located in South Africa, which resulted in a non-cash impairment. The impairment was allocated to the payments made by MC Mining in 2007 for the acquisition of two prospecting rights that were subsequently incorporated into the Makhado project.
In addition, administrative expenses fell to USD10.6 million from USD12.7 million year-on-year.
Less positively, MC Mining reported a 19% drop in revenue to USD26.4 million from USD32.7 million in the first half of 2018.
The Uitkomst thermal and metallurgical colliery produced 485,113 tonnes of coal, down from 607,960 tonnes produced a year prior, resulting in sales of 309,401 tonnes compared to 475,079 tonnes, respectively.
"The primary driver of declines in coal volumes was the expiry of a third party supply contract in the prior year, leading to a significant decrease in sales volumes," explained Chief Executive David Brown.
Meanwhile, average revenue per tonne was up 28% during the period to USD81.39 per tonne from USD63.52 per tonne last year.
MC Mining shares were untraded in London on Monday morning, last closing at 32.35 pence each, while in Johannesburg the shares were down 15% at ZAR5.20 each.
By Evelina Grecenko; [email protected]
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