Lower production and lower sales volumes have contributed to a decrease in JSE-listed Wescoal’s headline earnings per share (HEPS) and earnings per share (EPS) for the financial year ended March 31.
The group, which will release its results on June 25, on Friday said it expected its HEPS to be between 17.4c and 20.8c – a year-on-year decrease of between 55% and 63%.
EPS of between 19.3c and 23.1c, would be between 51% and 60% lower year-on-year.
Group production for the year, at 5.88-million tonnes, was 935 000 t lower year-on-year.
The lower-than-expected overall production resulted mainly from the Vanggatfontein mining contractor change-over and subsequent labour disruptions; Elandspruit being impacted by the suspension of the underground mining section; above-average seasonal rainfall during February and March; the dispute regarding the Khanyisa Triangle joint venture having resulted in production downtime; and the disposal of Intibane Colliery during June 2018.
The impact of the Intibane colliery disposal was offset by extensive increases in both production and sales volumes from the Khanyisa Triangle during the last quarter of the financial year.
DEBT UPDATE
Meanwhile, to achieve its objective of growing sustainably and becoming a leading provider of a reliable energy source, Wescoal is currently finalising the refinancing of its existing credit facilities, through a consortium of South African commercial banks consisting of Nedbank and the Standard Bank of South Africa.
The new long-term refinance facilities are for a combined R1.1-billion, with a provision that also gives Wescoal access to an additional R500-million accordion facility, subject to credit approval, but within the legal agreements of the refinance facilities, thus reducing the lead time towards accessing this extra liquidity facility.
The improved capital structure will consolidate and optimise various debt instruments, thereby enhancing the group’s liquidity and overall balance sheet strength.
This will further enable the group to pursue specific existing organic growth expansion projects and, subject to lender approval, take advantage of further inorganic acquisition opportunities in the market.