MINING AND PROPERTY BOOST HCI IN INTERIM PERIOD

Results for six months to September show revenue increased 20% at mining segment and 19% at property division.

The interim numbers for Hosken Consolidated Investments (HCI) showed the profit prowess of its unsung mining and property interests, which remain the largest unlisted segments inside the trade union aligned empowerment giant.

HCI is best known for its majority stake in JSE-listed gaming and leisure group Tsogo Sun as well as other listed investments such as Hosken Passenger Logistics & Rail, eMedia Holdings, Deneb Investments and Niveus Investments.

Results released just before market close on Wednesday showed HCI’s mining segment — which revolves mainly around two sizeable coal mines and a sliver of platinum — pushing up revenue 20% to R733m. After tax profits were hiked 76% to R194m.

HCI CEO Johnny Copelyn noted that increased revenue was recorded at the Palesa and Mbali Collieries.

Sales volumes at Palesa decreased by 46,000 tons (4%) due to mining contractor inefficiencies, but the Mbali Colliery increased revenue by 49% and sales volumes 9% to 502,000 tons.

Copelyn said export sales prices achieved at the Mbali Colliery were 30% higher than the corresponding interim period in 2017.

He said margins at the Palesa Colliery increased from 18% to 19% and at the Mbali Colliery from 34% to 47%.

The strong performance is likely to further fuel speculation around a potential separate listing of these coal interests on the JSE.

On the property side, revenue increased 19% to R288m, thanks mainly to the new development revenue of R15m generated by the Whale Coast Village Mall and another R10m from Shell House.

There was a slight margin increase to 45% with Copelyn reporting further tenanting in the Westlake and Monte Circle precincts.

The property segment’s after tax profits came in at R46m, about 28% higher than the previous year.

There was not much detail of HCI’s other “large” unlisted bet — energy exploration company Impact Oil & Gas.

Comments on the interim statement noted a loss of R5m for Impact, measured against a profit of R43m the previous interim period when R53m was earned from a part disposal of an exploration licence.

Source: Business Day Live – Marc Hasenfuss