Coal miner and supplier Buffalo Coal reported a consolidated profit of R33.2-million and R36.8-million in the fourth quarter of 2019 and 2019 financial year.
This compares to a consolidated profit of R26.5-million in the fourth quarter of 2018, and a consolidated loss of R68.4-million in the 2018 financial year.
The 154% increase in profits for 2019 compared to 2018 was mainly the result of an R8-million impairment loss of property, plant and equipment in 2019 compared to R67.5-million in 2018; R7.8-million of net foreign exchange gains in 2019 compared to R57.4-million net foreign exchange losses in 2018; a positive fair value adjustment on conversion option and warrant liability of R38.4-million in 2019 compared to R900 000 in 2018; marking a 32% decrease in general and administration, and a 33% decrease in finance expenses over comparative periods.
The improvements year over year was partially offset by a 51% decrease in gross profit which was mainly driven by the closure of the Magdalena mine in the third quarter of 2018.
The company owns 100% of the shares in Buffalo Coal (BC) Dundee, which has an interest in two operating coal mines in South Africa.
BC Dundee indirectly holds a 70% interest in the BC Dundee Properties through its 70% interest in Zinoju Coal, which holds all of the mineral rights with respect to the BC Dundee Properties.
The remaining 30% interest in Zinoju is held by South African black economic empowerment partners.