Minergy Limited (MIN.bw) 2021 Abridged Report
For the 2021 financial year, the Company generated revenue of P193 million (2020: P81 million), incurred costs of sales of P256 million (2020: P150 million) and operating costs of P23 million (2020: P31 million), resulting in an operating loss of P86 million (2020: P100 million). Finance costs of P51 million (2020: P17 million) were incurred, bringing the net loss before taxation to P136 million (2020: P117 million). Financial performance during the 2021 financial year can be divided into two distinct periods with very different operating environments, namely:
‣ the first eight-month period (July 2020 – February 2021), which was negatively impacted by delayed funding, COVID-19 impacts and excessive rain; and
‣ the last four-month period (March – June 2021), which was a more stable production environment moving toward nameplate capacity.
The adverse conditions in the first eight-month period contributed to 86% of the total gross loss.The stable four-month period alone contributed to 50% of total sales value, which helped decrease monthly gross losses, albeit below break-even levels. Initially production and sales recovered in July and August 2020, with the easing of COVID-19 restrictions and was bolstered by the successful opening of the rail siding. However, as noted above, mining and plant throughput challenges impacted sales output.
Heavy rain experienced from December 2020 to February 2021 flooded the mine pits, affecting production and made mine accessibility difficult, also impacting sales. The rain subsided in March 2021, and Minergy entered a more stable environment with a positive impact on operations. Good recoveries in production and sales were experienced during the last four-month period of the year, moving closer toward break-even.
The first tranche of additional funding provided by the Minerals Development Company Botswana (Proprietary) Limited (“MDCB”) was received in December 2020, which allowed Minergy to settle the majority of the contractor’s arrears at the time and allowed for their teams to be remobilised.
COAL SALES PERFORMANCE
During the financial year Minergy sold 416 185 tonnes (2020: 198 057 tonnes), a 110% increase compared to the previous year, supported by increased sales in Botswana and internationally in South Africa and Namibia. Sales for June 2021 exceeded 56 000 tonnes, a record since inception. Average sales pricing back on the mine increased late in the financial year on the back of buoyant interna