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Hwa - Hwange Colliery Company - Abridged Income Statement For The Six Months

Release Date: 01/10/2008 07:05:09      Code(s): HWA
HWA - Hwange Colliery Company - Abridged Income Statement For The Six Months    
                             Ended 30 June 2008                                 
HWANGE COLLIERY COMPANY LIMITED                                                 
(Incorporated in Zimbabwe)                                                      
Code: HWA & ZW0009011934                                                        
Abridged income statement For the six months ended 30 June 2008                 
INFLATION ADJUSTED                                                              
6 MONTHS           6 MONTHS         12 MONTHS           
                        30 JUNE 2008       30 JUNE 2007     31 DEC 2007         
                        $`000 000`         $`000 000`       $`000 000`          
                                                                                
Sales Revenue            131 740 837 975    27 471 287 323   65 957 984 788     
                                                                                
Profit from              (218 146 288 697)  (8 760 652 579)  3 348 258 689      
operations                                                                      

Monetary                 16 905 920 713     169 863 303 683  (7 177 658 428)    
adjustment                                                                      
                        (201 240 367 984)  161 102 651 104  (3 829 399 739)     
Finance costs            1 063 484 186      2 095 599 370    (7 893 220 617)    
Fixed assets             -                  (7 648 854 229)  603 363 443        
impairment                                                                      
(loss)/                                                                         
reversal                                                                        
Write-down               -                  192 932 221      -                  
investments                                                                     
                                                                                
Profit                   (200 176 883 798)  155 742 328 466  11 119 256 913)    
before                                                                          
taxation                                                                        
Taxation                 (633 993 652 320)  (56 384 732      (4 273 528 335)    
760)                                 
                                                                                
Profit                   (834 170 536 118)  99 357 595 706   (15 392 785 248)   
after                                                                           
taxation                                                                        
                                                                                
Attributable  - basic    (457 832 346 936)   55 883 233 896  (8 448 290 476)    
earnings per                                                                    
share                                                                           
(cents)                                                                         
                                                                                
             - diluted  (457 832 346 936)  55 883 233 896   (8 448 290 476)     

Headline      - basic    (463 263 755 634)  55 883 252 891   (8 448 550 459)    
(loss)/                                                                         
earnings                                                                        
per share                                                                       
(cents)                                                                         
                                                                                
             - diluted  -463,263,755,634   55,883,252,891   -8,448,550,459      

Number of                182,200,000        177,795,000      182,200,000        
Shares                                                                          
                                                                                
Reconci-                                                                        
liation                                                                         
between                                                                         
(loss)/                                                                         
earnings and                                                                    
headline                                                                        
(loss)/                                                                         
earnings                                                                        

(Loss)/Profit            -834,170,536,118   99,357,595,786   -15,392,785,248    
after                                                                           
taxation                                                                        
Impairment               0                  67,875           0                  
of fixed                                                                        
assets                                                                          
Sale of                  -9,896,026,647     -34,105          -473,688           
scrap                                                                           
Headline                 -844,066,562,765   99,357,629,556   -15,393,258,936    
(loss)/                                                                         
Earnings                                                                        
after                                                                           
taxation                                                                        
                                                                                
                                                                                

ABRIDGED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2008                 
HISTORICAL COST                                                                 
                          6 MONTHS        6 MONTHS          12 MONTHS           
30 JUNE 2008    30 JUNE 2007      31 DEC 2007         
                          $`000 000`      $`000 000`        $`000 000`          
                                                                                
Sales Revenue              96 600 919 964  108 775           1 645 362          

Profit from                34 496 954 673  (43 378)          17 293 166         
operations                                                                      
                                                                                
Monetary                   -               -                 -                  
adjustment                                                                      
                          34 496 954 673  (43 378)          17 293 166          
Finance costs              (264 193 517)   707               (361 668)          
Fixed assets               -               -                 -                  
impairment                                                                      
(loss)/reversal                                                                 
Write-down                 -               -                 -                  
investments                                                                     
                                                                                
Profit before              34 232 761 156  (42 671)          16 931 498         
taxation                                                                        
Taxation                   (2 999 077      (3 963)           ( 3 513 882)       
                          211)                                                  
                                                                                
Profit after               31 233 683 945  (46 634)          13 417 616         
taxation                                                                        
                                                                                
Attributable    - basic    17 142 526 863  (26 229)          7 364 224          
earnings per                                                                    
share (cents)                                                                   
                                                                                
               - diluted  17 142 526 863  (26 229)          7 364 224           
                                                                                
Headline        - basic    17 138 499 220  (  26 344)        7 340 324          
(loss)/                                                                         
earnings per                                                                    
share                                                                           
( cents)                                                                        
                                                                                
               - diluted  17,138,499,220  -26,344           7,340,324           
                                                                                
Number of                  182,200,000     177 795 000       182 200 000        
Shares                                                                          
                                                                                
Reconciliation                                                                  
between                                                                         
(loss)/earnings                                                                 
and                                                                             
headline                                                                        
(loss)/earnings                                                                 
                                                                                
(Loss)/Profit              31,233,653,945  (46 634)          13 417 616         
after taxation                                                                  
Impairment of              0               -                 -                  
fixed assets                                                                    
Sale of scrap              -7,338,367      (204)             (43 546)           
Headline                   31,226,315,578  -46,838           13,374,070         
(loss)/earnings                                                                 
after taxation                                                                  
ABRIDGED BALANCE SHEET AS AT 30 JUNE 2008                                       
INFLATION ADJUSTED                                                              
6 MONTHS            6 MONTHS           12 MONTHS                
                30 JUNE 2008        30 JUNE 2007       31 DEC 2007              
                $`000 000`          $`000 000`         $`000 000`               
                                                                                
Assets                                                                          
Non-current      3 835 092 435 701   272 364 261 702    1 168 349 328 783       
assets and                                                                      
investments                                                                     

Current assets   413 726 660 332     53 660 840 909     60 982 056 630          
                                                                                
                                                                                
4 248 819 096 033   326 025 102 611    1229 331 385 413         
                                                                                
                                                                                
                                                                                
Equity and                                                                      
Liabilities                                                                     
                                                                                
Share capital    100 579 387 310     -                  100 579 387 310         
Reserves and     2791 162 037 018    232 774 957 532    820 010 939 417         
retained profits                                                                
Shareholders     2891 741 424 328    232 774 957 532    920 590 326 727         
equity                                                                          
Deferred         999 231 802 835     78 704 978 202     300 857 540 102         
taxation                                                                        
Current          357 845 868 870     12 417 155 571     7 883 518 584           
liabilities                                                                     
Long Term        -                   2 128 011 306      -                       
Liabilities                                                                     
                                                                                
                4248 819 096 033    326 025 102 611    1229 331 385 413         
ABRIDGED BALANCE SHEET AS AT 30 JUNE 2008                                       
HISTORICAL COST                                                                 
                  6 MONTHS              6 MONTHS       12 MONTHS                
                  30 JUNE 2008          30 JUNE 2007   31 DEC 2007              
$`000 000`            $`000 000`     $`000 000`               
                                                                                
Assets                                                                          
Non-current assets 3 851 275 471 099     34 884         384 819 406             
and investments                                                                 
                                                                                
Current assets     316 393 456 416       65 497         5 203 214               
                                                                                

                  4167 668 927 515      100 381        390 022 620              
                                                                                
                                                                                

Equity and                                                                      
Liabilities                                                                     
                                                                                
Share capital      -                     -              -                       
Reserves and       2836 741 896 295      (36 205)       288 472 203             
retained profits                                                                
Shareholders       2836 741 896 295      (36 205)       288 472 203             
equity                                                                          
Deferred taxation  973 081 162 189       7 508          98 903 085              
Current            357 845 869 031       110 192        2 647 332               
liabilities                                                                     
Long Term          -                     18 886         -                       
Liabilities                                                                     
                                                                                
                  4167 668 927 515      100 381        390 022 620              
Abridged Cash Flow Statement For the six months ended 30 June 2008              
INFLATION ADJUSTED                                                              
                   6 MONTHS          6 MONTHS           12 MONTHS               
                   30 JUNE 2008      30 JUNE            31 DEC 2007             
2007                                       
                   $`000 000`        $`000 000`         $`000 000`              
                                                                                
Cash flows from                                                                 
operating                                                                       
activities                                                                      
Operating           (201 240 367      161 102 651 104    (3 829 399 739)        
(loss)/profit       984)                                                        
Non - cash items    (112 768 973      (141 976 035 978)  (24 720 051 573)       
                   424)                                                         
                                                                                
Operating cash flow                                                             
before investment                                                               
in working capital  (314 009 341      19 126 615 126     28 549 451 312)        
                   408)                                                         
Net movement in     (2 782 253 414)   (5 554 157 713)    51 054 243 966         
working capital                                                                 
Net financing       1 063 484 186     2 095 599 370      (7 893 220 617)        
income /(cost)                                                                  
                                                                                
(315 728 110      15 668 056 783     14 611 572 037          
                   636)                                                         
                                                                                
Tax Paid            -                 (477 399)          (3 141 696)            

Net cash flows from (315 728 110      15 667 579 384     14 608 430 341         
operating           636)                                                        
activities                                                                      

Cash flows from                                                                 
investing                                                                       
activities                                                                      
Net cash flow       (2 192 814 330)   (6 550 732 905)    (5 286 143 083)        
related to fixed                                                                
assets                                                                          
                                                                                
Net cash flow       (317 920 924      9 116 846 479      9 322 287 258          
before financing    966)                                                        
activities                                                                      
                                                                                
Cash flows from                                                                 
financing                                                                       
activities                                                                      
Increase in share   -                 -                  6 786 659              
premium                                                                         
(Decrease)/         333 123 983 636   (9 333 087 102)    (9 339 737 816)        
Increase in loans                                                               
                                                                                
Net movement        15 203 058 670    ( 216 240 623)     (10 663 899)           
in cash and                                                                     
cash equivalents                                                                
                                                                                

Represented by:                                                                 
Cash and cash       579 281 078       504 347 799        589 944 977            
equivalents at                                                                  
beginning of the                                                                
year                                                                            
Cash and cash       15 782 339 748    288 107 176        579 281 078            
equivalents at                                                                  
end of the period                                                               
                                                                                
Increase/(decrease) 15 203 058 670    ( 216 240 623)     ( 10 663 899)          
in cash and cash                                                                
equivalents                                                                     
ABRIDGED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2008              
HISTORICAL COST                                                                 
                     6 MONTHS             6 MONTHS       12 MONTHS              
30 JUNE 2008         30 JUNE 2007   31 DEC 2007            
                     $`000 000`           $`000 000`     $`000 000`             
                                                                                
Cash flows from                                                                 
operating                                                                       
activities                                                                      
Operating             34 496 954 673       (43 378)       17 293 166            
(loss)/profit                                                                   
Non - cash items      (350 102 419 599)    (180)          (18 025 032)          
                                                                                
Operating cash flow                                                             
before investment                                                               
in working capital    (315 605 464 926)    (43 558)       (731 866)             
Net movement in       (3 818 171 772)      56 285         293 422               
working capital                                                                 
Net financing         ( 264 193 517)       707            (361 668)             
income /(cost)                                                                  
                                                                                
                     (319 687 830 215)    13 434         (800 112)              
                                                                                
Tax Paid              -                    -2             1                     
                                                                                
Net cash flows from   (319 687 830 215)    13 432         (800 111)             
operating                                                                       
activities                                                                      
                                                                                
Cash flows from                                                                 
investing                                                                       
activities                                                                      
Net cash flow         ( 748 378 981)       (32 150)       (38 901)              
related to fixed                                                                
assets                                                                          

Net cash flow         (320 436 209 196)    (18 718)       (839 012)             
before financing                                                                
activities                                                                      

Cash flows from                                                                 
financing                                                                       
activities                                                                      
Increase in share     -                    -              79                    
premium                                                                         
(Decrease)/Increase   336 218 354 417      20 976         1 033 160             
in loans                                                                        

Net movement in cash  15 782 145 221       2 258          194 227               
and cash equivalents                                                            
                                                                                

Represented by:                                                                 
Cash and cash         194 527              299            299                   
equivalents at                                                                  
beginning of the                                                                
year                                                                            
Cash and cash         15 782 339 748       2 557          194 526               
equivalents at end                                                              
of the period                                                                   
Increase/(decrease)   15 782 145 221       2 258          194 227               
in cash and cash                                                                
equivalents                                                                     
STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2008            
        Share       Capital          Gene- Retained         Total               
        Capital     Reserves         ral   Profit                               
                                     Rese-                                      
rves                                       
        $`000 000`  $`000 000`       $`00  $`000 000`       $`000 000`          
                                     0                                          
                                     000`                                       
HISTO-                                                                          
RICAL                                                                           
COST                                                                            
Balance  -           275 044 164      -     13 428 039       288 472 203        
as at 1                                                                         
January                                                                         
2008                                                                            
                                                                                
Net      -           -                -     31 233 683 945   31 233 683 945     
Profit                                                                          
for                                                                             
the                                                                             
half                                                                            
year                                                                            
                                                                                
Reva-    -           3778 073 724     -     -                3778 073 724       
luation              104                                     104                
surplus                                                                         
                                                                                
Transfer             (972 853 983     -     -                (972 853 983       
to                   957)                                    957)               
deferred                                                                        
tax                                                                             
                                                                                

Balance  -           2805 494 784     -     31 247 111 984   2836 741 896       
as                   311                                     295                
at                                                                              
30 June                                                                         
2008                                                                            
                                                                                
INFLATIO                                                                        
N                                                                               
ADJUSTED                                                                        
Balance  100 579     820 010 939 417  -     101 893 571      920 692 220        
as at 1  387 310                                             298                
January                                                                         
2008                                                                            
                                                                                
Net      -           -                -     (834 170 536     (834 170 536       
Profit                                      118)             118)               
for                                                                             
the                                                                             
half                                                                            
year                                                                            
                                                                                
Reva-    -           3778 073 724     -     -                3778 073 724       
luation              104                                     104                
surplus                                                                         
                                                                                
Transfer -           (972 853 983     -     -                (972 853 983       
to                   957)                                    957)               
deferred                                                                        
tax                                                                             
                                                                                
                                                                                
Balance  100 579     3625 230 679     -     (834 068 642     2891 741 424       
as      387 310     564                    547)             327                 
at 30                                                                           
June                                                                            
2008                                                                            
STATEMENT TO SHAREHOLDERS                                                       
(For the six months ended 30 June 2008)                                         
BUSINESS ENVIRONMENT                                                            
The hyperinflationary environment continued into the first six (6) months of the
year negatively impacting on the costs of doing business. The year on year      
inflation rate as at 30 June 2008 was 11.2 million percent up from 157 184%     
recorded in June 2007. The foreign exchange management system was deregulated   
and the Reserve Bank of Zimbabwe`s 2008 First Quarterly Monetary Policy         
Statement introduced an interbank exchange rate determined by the market forces.
The interest rates remained high on the money market and not conducive to local 
borrowings. Foreign currency shortages continued to affect the economy thus     
curtailing imports and debt servicing.                                          
OPERATIONS                                                                      
Frequent breakdowns of critical equipment, especially the conveyor systems for  
moving coal from the mines, had an impact on the tonnage that could have been   
produced in the first half of the year.                                         
This was on the backdrop of increased demand for coal and coke on both the local
and regional markets.  Total coal sales for the six months period under review  
decreased by 19% from 1 069 890 tonnes achieved during the same period last year
to 862 392 tonnes despite the mining contract that the Company entered into in  
October 2007.                                                                   
HPS coal deliveries to Hwange Power Station amounted to 589 329 tonnes compared 
to 776 168 tonnes achieved for the same period last year representing a 24%     
decrease.  HCC/HIC coal deliveries marginally decreased by 7% to 273 063 tonnes 
(June 2007 - 293 722 tonnes).                                                   
Coke sales increased by 8% from 87 966 tonnes for the same period in 2006 to 94 
599 tonnes as a result of the Company`s export drive.                           
There were no coke oven gas supplies to the Hwange Power Station for the first  
six (6) months of 2008 as compared to 7 152 650 Nm3 supplied during the same    
period last year due to the major breakdown on the gas pipeline.                
FINANCIAL REVIEW                                                                
The unaudited accounts were prepared in compliance with International Financial 
Reporting Standard (IFRS) and International Accounting Standard (IAS) 29        
(Financial Reporting in Hyperinflationary Economies). The accounts have also    
been done in compliance with International Accounting Standard (IAS) 34         
(International Financial Reporting).  However, the following comments on the    
financial statements are based on the historical cost figures using the Zimbabwe
dollar currency.                                                                
The Company achieved sales revenue of $96.6 quadrillion for the six months under
review and this was way above the $108.8 billion for the same period last year. 
The resultant unaudited net profit after taxation of $31.3 quadrillion compared 
favourably to a net loss of $46.6 billion incurred for the same period last     
year. This was largely attributed to the adoption of stringent cost control     
measures across the board and proactively engaging the National Incomes and     
Pricing Commission for equitable selling prices of products especially HPS coal,
prices of which still remained relatively depressed throughout the period under 
review.                                                                         
Total fixed assets, investments and capital reserves increased to $3 829        
quadrillion as compared to $34.9 billion for the same period last year. This is 
attributed to a net revaluation on property plant and equipment as at 30 June   
2008.                                                                           
OUTLOOK                                                                         
The acquisition and delivery of the coal fines recovery plant from Republic of  
South Africa is still in progress and other alternatives were being pursued from
Peoples` Republic of China.                                                     
As a permanent solution to operational bottlenecks, the Company is pursuing its 
recapitalization programme to be implemented by year end. This would            
significantly boost production and should be able to achieve sustainable        
production output that would increase the company`s market share.               
The demand for coal and coke products is expected to remain firm in both the    
domestic and export markets.                                                    
The focus for the second half of the year would be on improving margins through 
increased productivity, increased exports, tight cost control measures and      
achieving viable product prices through continuous engagement of the National   
Incomes and Pricing Commission.                                                 
DIVIDEND                                                                        
In light of the performance of the Company and the need for recapitalization of 
the business, the Board has not considered the declaration of any interim       
dividend.                                                                       
DIRECTORATE                                                                     
There were no changes to the Board of Directors since the Annual General        
Meeting.                                                                        
By Order of the Board                                                           
T K NCUBE                                                                       
COMPANY SECRETARY                                                               
29 August 2008                                                                  
Registered Office                                                               
7th Floor, Coal House                                                           
17 Nelson Mandela Avenue                                                        
P O Box 2870                                                                    
Harare                                                                          
Zimbabwe                                                                        
Sponsor                                                                         
Sasfin Capital                                                                  
(A division of Sasfin Bank Limited)                                             
30 September 2008                                                               
Date: 01/10/2008 07:05:08 Supplied by www.sharenet.co.za                     
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