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COAL MINES SKETCH BRIGHTEST PICTURE FOR HCI

23 Nov General

Hosken Consolidated Investments CEO Johnny Copelyn says coal mining profits continued to improve on higher coal prices.

Hosken Consolidated Investments (HCI), the trade union-aligned conglomerate, posted a strong showing from its coal mines amid an operational environment deemed “anarchic”.

HCI’s mainstay investments are gaming group Tsogo Sun and broadcast media group e-Media. But the star performer in the interim results issued on Wednesday was the coal mining hub, which more than doubled profit before tax to R110m.

It was not plain sailing, though. CEO of HCI Johnny Copelyn said coal mining profits continued to improve on higher coal prices.

But he also noted ominously: “The business remains subject to anarchic pressures all around it with interruptions caused by various groups physically obstructing its deliveries and personnel.”

Loading activities had been halted at various times due to community unrest in the surrounding area, Copelyn said.

He reported that steps had been taken to protect the coal operations from further upheavals and was satisfied that the mines could continue to operate profitably “despite this extreme negativity”.

He hoped the upheavals would subside after the December ANC elective conference.

HCI results also showed the brakes had been applied to profit at passenger transport specialist Golden Arrow Bus Services — unfortunately coinciding with efforts to steer the company towards a JSE listing.

A breakdown of HCI’s investments by division reflected a drop of 19% in profit before tax to R129m.

Copelyn said the transport company’s profitability retreated as the dollar price of oil ticked up and the rand weakened. Profit was also hit by an increase of 17% in finance costs and 10% in depreciation.

He contended Golden Arrow continued to be well run. “It has good prospects over time of growing through acquisitions, which will enhance its profitability in the future.”

Source: Business Live: Marc hasenfuss