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LONDON (Alliance News) - Bisichi Mining PLC Thursday reported a big boost in profit in 2014 after it launched a turnaround plan to improve performance at the Black Wattle colliery and moved machinery to two two of its more profitable open-cast pits.
The coal miner reported pretax profit of GBP1.6 million, up from GBP102,000 in 2013, while earnings before interest, tax, depreciation and amortisation rose to GBP4.6 million from GBP3 million the year before. The profit improvement came despite a drop in revenue to GBP26.5 million, from GBP35.1 million.
Bisichi said the Black Wattle colliery in South Africa gave a strong performance in the second half of the year, attributed to the implementation of a turnaround plan and improved production at Black Wattle's opencast pits.
The turnaround plan involved moving machinery from Black Wattle to two of its more profitable production pits in order to increase production from those areas, after operations were hit severely when one of its main pits ran into unrecorded old underground workings.
Although the plan initially suffered a short-term set-back caused by the unusually heavy rainfall in the first quarter of 2014, Black Wattle steadily increased production from its lower costing pits. The increased production from the two existing pits ensured that the mine returned to acceptable levels of profitability in the second half of 2014, the company said.
Delivery of coal from a new 2.6 million tonne reserve also commenced and is expected to
contribute to earnings in 2015, it said, while demand for Black Wattle coal remains strong despite historically low international coal prices.
Bisichi added that its UK property portfolio continues to perform well after signing a GBP6 million loan facility with Santander UK PLC in January.
It will pay a final dividend of 3 pence, in addition to the interim dividend of 1p per share, and said it has a dividend yield of 5% at year-end share price.
"Although we expect depressed coal prices to continue, Black Wattle will continue its focus on keeping its cost of production low. Meanwhile, our UK retail property investment portfolio, which underpins our direct mining business, remains virtually fully let. We have confidence, therefore, in the prospects for Bisichi in 2015," Chairman Michael Heller said in a statement.
Shares in Bisichi were trading up 4% at 65.00 pence per share late Thursday afternoon.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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