Universal posts strong quarter amid takeover
PERTH (miningweekly.com) – South Africa-focused coal miner Universal Coal has reported an 11% increase in run-of-mine (RoM) production for the March quarter, and a 16% increase is sales volumes, compared with the previous corresponding period.
The miner on Wednesday reported that quarterly RoM production reached three-million tonnes, up from the 2.7-million tonnes produced in the previous quarter, while total coal sales increased from 1.7-million tonnes to 1.9-million tonnes.
Universal reported a record group earnings before interest, taxes, depreciation and amortization (Ebitda) during the quarter, of A$22.3-million, with the miner saying it was on course to meet its guidance of A$73-million for the full 2020.
“The company has started delivering on its market promise, with the capital reinvestment of two of its projects simultaneously delivering record Ebitda for the quarter,” said CEO Tony Weber.
“Per forecast, export sales have increased 75% for the quarter as a result of expected production levels at New Clydesdale and access to the Paardeplaats openpit at North Block Complex. While RB1 export prices were positive in the March quarter, these will experience headwinds forward looking, however, favourable movement in the quarterly US dollar/South African rand exchange rates should partially offset any reduction in price.”
Weber noted that although volumes were under pressure owing to softer demand on the back of the Covid-19 pandemic, the company remained profitable and was confident that the forecast Ebitda guidance for 2020 would be realised.
ASX-listed TerraCom has recently started the compulsory acquisition of the remaining shares in Universal Coal, after a successful takeover offer, under which it offered Universal shareholders 10c in cash and 0.6026 new TerraCom shares for each Universal share held.
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