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LONDON (Alliance News) - Coal miner Bisichi Mining PLC Thursday said it swung to a first-half loss on the back of a fall in revenue, after production at its South African coal mines was hit by heavy rainfall at the beginning of the year, but said it still expects to return to profitability later in the year.
Bisichi Mining reported a pretax loss of GBP288,000 for the six months to June 30, compared with a pretax profit of GBP1.6 million a year earlier, as operating costs overtook revenue generated in the period, as production at its South African coal mines fell.
Revenue declined to GBP12.3 million, down from GBP19.1 million last year.
The company warned back in May that a planned increase in production at its South African coal mines suffered a short-term set-back due to heavy rainfall in the first quarter, but said it was expecting to return to acceptable levels of profitability in the second half of the year.
"This inevitably has had an adverse impact on profitability in the first half of the year but, as a direct result of prompt action by our mine management, the mine had returned to profitability
by the end of the second quarter," the company said in a statement Thursday.
In Thursday's statement, the coal miner reiterated its expectations for improved profitability in the second half of the year, and said its UK property portfolio is performing well.
"Although we continue to operate in an environment of extremely low coal prices, we expect the changes implemented at Black Wattle to result in a stronger performance from our South African operations for some time to come," said Chairman Michael Heller in a statement.
At the end of 2013, the company's open cast mining operations at Black Wattle, its South African coal mining subsidiary, were hit hard when one of its main production pits ran into unrecorded old underground workings. However, the company has now put in place a turnaround plan to ensure the mine returns to better profitability later this year. Those plans included relocating machinery to
two of its profitable production pits in order to increase production from those areas, and the development of the new reserve at Blue Nightingale.
Bisichi Mining shares were up 2% at 102.00 pence Thursday afternoon.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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