Wescoal’s Keaton acquisition paying off

JUNIOR coal producer Wescoal yesterday paid a dividend, reduced debt and reported a surge in revenue in the six months to September as it concluded its acquisition of Keaton Energy.

Wescoal said its R525 million Keaton acquisition had paid off.

The company said revenue had surged 55 percent to R1.61 billion, and it paid a R14m dividend during the period.

Revenue from the mining division more than doubled to R1.017bn, compared with R482m in the previous period.

Sales were buoyed by “opportunistic” short-term coal sales, as sales to Eskom jumped to 1.3 million tons from 0.7 million tons in the prior period.

Total coal sales from the mining division almost doubled to 2.4 million tons during the period, compared with 1.3 million tons in the previous period.

Wescoal’s trading division’s sales revenue was R593m.

Wescoal chief executive Waheed Sulaiman said: “The past six months have been productive and encouraging in some tough operating conditions.

“We concluded the Keaton Energy acquisition and continue to bed that down.

“Our recently secured longterm debt facility and stronger cash flow position us to take advantage of internal and external growth opportunities.

“We are on track to meet our medium-term objective of eight million run of mine tons per annum.”

Wescoal said with the inclusion of Keaton on its books the business’s coal resources were boosted in excess of 300 million tons with four operating mines and three processing plants.

The combined group was expected to meet increased demand from Eskom and other domestic and export customers.