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Johannesburg - South African mining contractor Sentula Mining [JSE:SNU] on Friday reported flat first-half headline earnings per share of 10.6 cents and said it expected fundamentals supporting its revenue base to remain intact for the second six months.
Revenue in the six months rose 10% to R1.345bn.
“In terms of exploration drilling, mining services, earth moving ... what’s in the first half, is projected to continue for the second half,” chief executive Robin Berry told Reuters.
He said contracts were in place until the end of the financial year, even though the second half usually falls in the wetter part of the raining cycle and a temporary slowdown was expected during the Christmas period.
Berry also said that while the global economic uncertainty was impacting growth in the mining industry, the coal sector remained reasonably robust, providing opportunities for contractors.
The company is also benefiting from its geographic diversification in its exploration drilling unit, with 65% of its activities outside South Africa.
Berry said there were opportunities for growth at several of Sentula’s subsidiaries, although the company would be cautious.
“We will prudently look at investment opportunities, but at the same time make sure we don’t expose ourselves in what could be a very volatile period for the next 12 to 18 months,” he said.
Berry said drilling operations in Ivory Coast, which were suspended due the political unrest in the west African country, restarted in June this year and were proceeding at full speed.
The Nkomati anthracite mine in South Africa, which was placed on care and maintenance from the end of May this year due to regulatory and environmental issues, is expected to resume operations in the first half of 2012.
“We are reasonably confident that we can work with the department of water affairs and have that process complete during the first quarter of next year. Our first intention is to then reopen the opencast operation which should be relatively quick thereafter,” Berry said.
He said the company was open to different options to maximise benefits from its coal mining operations, either by developing them or by selling them.
“There are lots of approaches but at this stage nothing formal for us to say we’ve got a firm offer on the table. But we are always looking at opportunities,” he said.
Shares in the company were down 0.51% at R1.95 by 07:38 GMT. Sentula shares are down 30% so far this year, compared with a 1.72% rise in Johannesburg's All Share [JSE:J203] index.
