JOHANNESBURG (miningweekly.com) – Mining services provider Sentula Mining on Wednesday reported a marginal improvement in its headline loss a share to 41.3c for the financial year ended March 31, compared with a loss of 43.7c in the 2014 financial year.
Its basic loss a share narrowed from 91.8c in 2014 to 50.5c in the year under review.
However, revenue decreased by 14% year-on-year to R1.37-billion, from R1.59-billion the year before.
The group’s earnings were positively impacted by a 47% increase, to R42-million, in operating profit in the overburden drilling and blasting segment; and a 14% increase in turnover and a 10% increase in operating profit in the mobile crane hire segment.
A R52-million net loss on the disposal of assets and a R15-million impairment on a transfer of assets to held-for-sale subsequently realised, relating mainly to the disposal of idle equipment in the opencast mining services segment, negatively impacted on earnings.
Other negative contributions included an R18-million write-down in consumables, R13-million in retrenchment costs in the opencast mining segment and a R48-million loss in the exploration drilling segment, as a result of the closure of international operations and the retrenchment of staff.
Sentula repaid debt of R217-million in the 12 months under review, R199-million of which was paid to a Standard Bank-led consortium.
OPERATIONAL REVIEW
The group reported that its bulk earthmoving businesses Benicon Opencast Mining, Classic Challenge Trading and JEF Drill and Blast had seen stable demand for their services.
However, tough trading conditions continued and margins remained under pressure across the opencast mining contracting sector.
Significant restructuring in the Benicon business during the first half of the financial year was starting to pay dividends and its capacity remained contracted for the next 36 months.
Further, Ritchie Crane Hire continued to grow its revenue base, while maintaining margin, in line with further capacity investment.
The range of mobile cranes in its fleet, along with increased visibility of work associated with a continued reliance on contracted services, had enabled the business to secure growth, while retaining its flexibility.
Meanwhile, a reduction in exploration work necessitated further restructuring of Sentula’s exploration operations and the consolidation of operating entities. Following the disposal of its international assets, these operations were now focused on drilling projects in Mozambique, Botswana and South Africa.
Sentula also continued to pursue the disposal of its stakes in various coal investments.
The group noted, however, that its exposure to the coal and energy sector, its diversified service offering, its blue-chip client base and its strategic association with Thebe Mining Resources, would continue to provide a solid base for the development of the business into the future.
“Continued growth in crane hire along with drilling and blasting operations and, coupled with secured opencast mining contracts and the rightsizing of its operational cost structures, provides the group with a strong base for the future,” added CEO Robin Berry.