Mining services company Sentula Mining on Wednesday reported “stable demand” during the 2014 financial year ended 31 March 2013 for its opencast mining services, despite tough trading conditions and margin pressures across the opencast mining contracting sector.
The stable demand was experienced by Sentula Group’s bulk earth moving businesses of Benicon Opencast Mining (Benicon) and Classic Challenge Trading (CCT), supported by JEF Drill and Blast (JEF).
Significant restructuring in the Benicon business, during the first half of the financial year, which cost the company R13 million, is starting to pay dividends.
As a result Benicon’s capacity will remain contracted for the next 36 months, while the resources of CCT and JEF are fully utilised at the current time, Sentula reported.
The opencast mining segment incurred an additional loss of R18 million during the financial year as a result of the disposal of the idle equipment.
The Sentula Group, made up of six operating segments, namely opencast mining services, exploration drilling, overburden drilling and blasting, crane hire, coal mining and equipment trading and spares.
Meanwhile, the 2014 financial year saw Ritchie Crane Hire continue to grow its revenue base, while maintaining margin, in line with further capacity investment. The range of mobile cranes in its fleet, in conjunction with increased visibility of work associated with a continued reliance on contracted services, has enabled the business to secure growth, while retaining its flexibility.
The Sentula Group continues to invest in capacity to grow this business on a sustainable basis.
A reduction in exploration work necessitated further restructuring of the exploration operations and the consolidation of operating entities.
Following the disposal of its international assets, these operations are now focused on drilling projects in Mozambique, Botswana and South Africa, Sentula reported.
Sentula aims to preserve the value of its mining services business in the short term by investing in growth opportunities in its drilling and blasting, as well as its mobile crane hire businesses, taking advantage from secured work for its bulk earthmoving businesses and improved operational efficiencies, maintaining the exploration business to take advantage of a future recovery in the exploration sector and monetising its stakes in the remaining coal assets.
“Continued growth in crane hire along with drilling and blasting operations coupled with secured opencast mining contracts and the rightsizing of its operational cost structures provides the group with a strong base for the future,” says Sentula Mining CEO Robin Berry.