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  • TerraCom (TER) shares are in the red following a half-yearly performance described as “somewhat disappointing” by its chief executive officer
  • The company clocked an after-tax net loss of $60.4 million due to high net finance costs, foreign exchange losses and the deconsolidation of its South African operations subsidiary
  • Earnings before interest, tax, depreciation and amortisation suffered a loss of $27.5 million
  • In some respite for the company, operational revenues were up 51 per cent compared to 2019 despite a sullen coal market
  • TerraCom is down 29.3 per cent following the announcement trading at 9.9 cents per share

TerraCom (TER) shares are in the red following a half-yearly performance described as “somewhat disappointing” by its chief executive officer.

The resource company amplified its after-tax loss for half year to $60.4 million, a stark contrast on the A$9.4 million loss incurred in the first half of FY20.

This comprised of $20.3 million in net finance costs and $21.6 million
non-cash items, including foreign exchange losses of $6.6 million and a $2.4 million hit from the deconsolidation of its subsidiary for South African operations, Universal Coal and Energy Holdings.

In its report, the company revealed management and board changes in its subsidiary Universal Coal and Energy Holdings meant TerraCom “lost control” of its South African Operations, with deconsolidation from the operations effective as at October 31 2020.

Earnings before interest, tax, depreciation and amortisation suffered a loss of $27.5 million.

“The current economic environment has been very uncertain and as a consequence the financial result from 1H FY2021 is somewhat disappointing,” TerraCom Chief Executive Officer Danny McCarthy explained.

“From an operational perspective, the Company is in very good shape and will be able to overcome the uncertainties associated with the ongoing economic challenges,” he commented.

In some respite for the company, operational revenues were up 51 per cent, despite a slump in coal prices, clocking in at $190.4 million compared to $125.4 million collected in 2019.

Run of mine production and coal sales were both down modestly on the prior corresponding period, clocking in at 6.8 million tonnes and 4.6 million tonnes respectively.

TerraCom also advised its refinancing programme had been delayed, with an update on the programme’s future expected by the end of the March 2021 quarter.

TerraCom shares are down 29.3 per cent following the announcement trading at 9.9 cents at 2:20 pm AEDT.

TER by the numbers
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