Story audio is generated using AI
Salungano Group, the Eskom coal supplier that resumed trading on the JSE in May following a three-year pause, is focused on mantaining performance and ensuring long-term sustainabilty after a turnaround in financial 2026. In its integrated annual report for the year ended March 2026, chair Humphrey Mathe said the resumption of trading on the bourse followed efforts to comply with the basic obligations expected of any listed company. “The board’s responsibility is now to ensure that the reporting discipline established during this period becomes embedded as an enduring feature of the organisation,” he said.After years of instability, Salungano ended 2026 on a stronger financial footing after it paid off debt, which improved the balance sheet. The company raked in bumper profits in the period thanks to productivity gains. The market has taken note and the stock has surged 24% from a year ago.Profit generated for the year increased twentyfold year on year from R10m to R209m as the ramp-up of the Moabsvelden colliery continued and the company resumed direct Eskom supply at Vanggatfontein.Mathe said that a better performance in a single reporting period does not, on its own, establish long-term resilience. The board’s responsibility is now to ensure that the reporting discipline established during this period becomes embedded as an enduring feature of the organisation— Humphrey Mathe“Sustainable recovery will depend on the quality and predictability of operational execution, continued cash generation, disciplined capital allocation, effective management of contractual commitments, and the maintenance of appropriate financial controls. These matters will remain central to the board’s oversight,” Mathe said.In October last year, subsidiary Keaton Mining entered a new coal service agreement to supply Eskom for five years with coal from Vanggatfontein, which will bolster revenue. The group, however, is not out of the woods, as it has had to allocate 74% of total liabilities, or R2.39bn, for long-term environmental rehabilitation provisions, which include environmental restoration, rehabilitation and decommissioning costs. The rehabilitation liability was considered as a key matter by audit firm SizweNtsalubaGobodo Grant Thornton. Mathe said the company’s total liabilities exceeded total assets by R348m, and its current liabilities exceeded its current assets by R509m, giving rise to the material uncertainty identified by the auditor. He said attention will remain directed towards holding-company liquidity, “the management of intercompany funding arrangements and the company’s ability to meet its obligations as they fall due”. The future is uncertain for Keaton Mining, which may enter liquidation if restructuring measures fail to yield results, according to the annual report. It said Vanggatfontein’s financial position depends on the successful implementation of a section 155 compromise or other restructuring measures. “The outcome remains dependent on stakeholder support and the legal and procedural execution of the process.”The JSE suspended trading in Salungano’s shares in August 2023 because it failed to submit financial results for the year ended March 2023 within listing deadlines. Shortly after this, Salungano announced business rescue proceedings for its Wescoal Mining division, which operates the Elandspruit and Khanyisa collieries.CEO Robinson Ramaite said in the annual report that financial 2026 represented a meaningful operational and financial turning point for the group. After several years of severe operational and financial strain, the group had strengthened its liquidity position and settled its outstanding bank debt in full. “Together with the restoration of reporting compliance and the lifting of the JSE trading suspension, these developments provide a more stable platform from which management can focus on sustaining operational performance and strengthening the group’s longterm resilience,” said Ramaite.Business Times
