by Udo Rypstra

Truck driver strike cost Wescoal R3m in lost profit

Truck drivers’ strike in October has taken R10m off Wescoal Holdings revenue

Wescoal loses R3m in profit due to transport strike
Strike cost R3m loss in profit

A three week truck drivers’ strike in October has taken R10m off Wescoal Holdings revenue line as deliveries of coal tol Eskom, explosives and diesel were disrupted, the junior coal miner states in its interim report.

“The net effect of this was a loss of R10m in revenue and R3m in profit for the mining division,” it said.

However, revenue for the six months ending September was higher at R351.4m compared to R337.1m previously. The outcome was R10.7m in profit from operations, slightly lower than the R11.5m recorded last year, which included about R4.6m from a non-recurring sale of an asset. No dividend was declared.

In September, Wescoal announced that it had signed a three-year, R700m supply deal with Eskom, effective from 1 June 2012.

More than 20 000 truck drivers took to the streets in often violent protests during September and October. An agreement to increase wages 10% from March, 2013 followed by 8% and 9% increases in subsequent years, was accepted by unions on October 10 with the Road Freight Employers Association.

According to Mining Mix, the strike created a potentially parlous situation for Eskom which was concerned that coal supplies would run dry at its recommissioned power stations where the stock yards are relatively small.

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