ASX-listed Universal Coal is confident of an expected return to profitability, targeting A$73-million of earnings before interest, taxes, depreciation and amortisation (Ebitda) for the 2020 financial year.

The company achieved Ebitda of A$24-million in the six months ended December 31, 2019, and made progress in the development of various projects.

Universal is also targeting to achieve sales volumes of 7.9-million tonnes by the end of the financial year, while it sold 3.9-million tonnes in the six months under review.

For example, Universal sold the first coal from its Ubuntu project to State-owned power utility Eskom in February. The colliery was expected to deliver 500 000 t of saleable coal in the remainder of the financial year ended June 30, 2020.

At the North Block Complex, the company has started mining at the Paardeplaats project, which is capable of producing domestic- and export-quality coal.

Meanwhile, declining coal prices have impacted on the South Africa-focused coal miner, with profit after tax falling by 95% year-on-year in the period under review. The company’s profits were also impacted by a 19% increase in mining costs in the six months under review, owing to a changeover of mining contractors at the New Clydesdale Colliery.

Universal has not declared an interim dividend for the six months under review, owing to corporate action ongoing with TCIG Resources, which is a subsidiary of TerraCom.

Universal last month launched proceedings in the High Court of Justice of England and Wales against an unsolicited takeover bid by TerraCom.

TerraCom had launched a 33.5c apiece offer for each Universal share held, consisting of 10c in cash and 0.6026 new TerraCom shares.

While Universal had urged shareholders not to take any action with regard to the takeover offer, TerraCom by February 19 had obtained over a 51% voting right to Universal shares.