Mokwena Morulane-led Minergy Limited suffers $9.5-million loss in 2021

Botswana-based holding company Minergy Limited has reported a loss of BWP106.9 million ($9.5 million) at the end of its 2021 fiscal year, which ended in June 2021.

Figures contained in its 2021 annual report revealed that revenue soared by nearly 140 percent, from BWP80.7 million ($7.2 million) in 2020 to BWP193 million ($17.2 million)

Despite its triple-digit expansion in revenue, the holding’s loss deepened by 16.4 percent to BWP106.9 million ($9.5 million), up from the loss of BWP91.9 million ($8.2 million) reported in 2020.

The $9.5-million loss sent its accumulated losses above the $20-million mark, as total accrued losses from operations and other activities soared from BWP139.7 million ($12.5 million) last year to BWP245.7 million ($21.9 million) at the end of its 2021 fiscal year.

Minergy Limited is a Botswana-based holding company of Minergy Group, which is engaged in mineral exploration and development at its Masama Coal Mine on the southern edge of the Mmamabula Coalfield in Botswana.

The Masama Coal Mine represents the first step in its strategy to become a mid-tier Southern African coal mining company.

Its weak performance at the end of its 2021 financial year was driven by a surge in costs during the period, as the group’s sales costs rose from BWP149.9 million ($13.4 million) in 2020 to BWP255.6 million ($22.8 million), while finance costs soared from BWP17.5 million ($1.56 million) to BWP50.5 million ($4.5 million).

Minergy Limited Independent Non-Executive Chairman Mokwena Morulane said the 2021 financial year was better than 2020, as the holding recorded stronger performance in the final quarter of the financial year.

“We have survived COVID-19 as well as extraordinary weather conditions that interrupted operations from pit flooding, impassable roads, and other related operational challenges. Fortunately, this has been followed by a stable production environment and a strong recovery in the market,” he said.

He noted that the holding will be able to generate sufficient cash flow to stabilize its business and break even, or better, if nameplate capacity is achieved and maintained at its Masama Coal Mine.

Despite the weak financial performance, Minergy’s total assets value increased from BWP443.7 million ($39.6 million) in 2020 to BWP543.4 million ($48.4 million) due to the revaluation of the Masama Coal Mine.

As of press time, Oct. 26, shares in the Botswana-based holding are worth BWP0.8 ($0.0713) per share, while its market capitalization is valued at BWP376 million ($33.5 million)

The market value of all the shares belonging to Claude de Bruin, a non-executive director in the holding, is worth BWP34.1 million ($3.04 million).