Wescoal CEO Reginald Demana on interim results & outlook
Wescoal’s headline earnings per share have risen to 3.3 cents. This is compared to a loss of 11.9 cents in the previous comparable period. Wescoal’s performance was largely driven by a solid operational turnaround strategy in the Mining division. No interim dividend has been declared. Wescoal CEO, Reginald Demana joins CNBC Africa for more.
Fri, 04 Dec 2020 16:03:23 GMT
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AI Generated Summary
- The operational turnaround strategy in the mining division significantly contributes to Wescoal's financial success, with a notable increase in production and sales.
- Wescoal aims to sustain its performance in the second half of the year and has ambitious plans to expand coal production and sales targets.
- The company's relationship with SCOM, a major client, remains strong despite challenges, reflecting Wescoal's resilience and adaptability in the competitive coal mining industry.
Wescoal, a prominent player in the coal mining industry, has showcased a remarkable operational turnaround strategy, leading to a significant improvement in its financial performance. The company's CEO, Reginald Demana, recently sat down with CNBC Africa to discuss the interim results and outlook for Wescoal. The interview began with a somber note as Demana expressed condolences for the loss of Mr. TS Mahlangu, a contract mining employee at the Mossvalden project, who tragically passed away following a machinery incident. Demana emphasized Wescoal's commitment to safety and the investigation being conducted in collaboration with regulators. The CEO highlighted the company's solid financial performance in the current period, attributing the success to a robust operational turnaround strategy in the mining division. Despite challenges posed by the COVID-19 pandemic and reduced coal off-take from major customers, Wescoal achieved a substantial increase in production and sales, resulting in a doubling of EBITDA and a profit of 11 million, compared to a loss in the previous reporting period. Demana expressed confidence in sustaining this performance in the second half of the year, with plans to increase coal production and sales targets. He addressed the impact of the pandemic on customer behavior, particularly discussing Wescoal's relationship with SCOM, a significant client in the industry. Demana acknowledged the challenges faced by SCOM due to low energy demand but expressed optimism for improved collaboration as the economy recovers. Despite changes in leadership at SCOM, Wescoal maintains strong relationships at the operational level and continues to engage in procurement processes to ensure supply stability. The CEO disclosed that approximately 65% of Wescoal's coal is supplied to SCOM, aligning with the company's targets. Nevertheless, off-take levels were slightly lower in the recent period due to pandemic-driven factors affecting energy demand in the country. Demana's insights underscore Wescoal's resilience in navigating industry dynamics and positioning itself for sustainable growth in the evolving market landscape.