Vunani Capital Partners (VCP), an investment group, has reported a decrease in earnings for the six months ending on August 31. This decline is attributed to challenges in the group's coal investments during the period. While VCP saw robust earnings during the same period in the previous year due to record coal prices, this year brought a series of difficulties, including a drop in coal prices, logistical problems, and mining challenges. These issues resulted in diminished earnings and cash receipts from coal investments during the interim period, preventing the declaration of an interim dividend for 2023.

The fall in coal prices was particularly notable, as prices in the first ten months of 2022 were well above $300 per tonne but have since more than halved. VCP primarily invests in junior coal miners with access to the Richards Bay Coal Terminal port, but logistical problems hampered coal transportation during the period, leading to reduced earnings in the resources and energy sectors.

Despite these challenges, VCP did note some positive developments in its coal mining operations and anticipates an improved performance in the resources sector in the second half of the year. If this improved performance materializes, VCP will consider the possibility of resuming dividends, subject to the normal solvency and liquidity tests. The group highlighted that regular dividend distributions are a key part of its objectives.

Due to these challenges, all of VCP's earnings metrics saw declines. The group reported revenue from operations of R6.7 million, down from R10.2 million in the previous comparative period. The resources and energy segment contributed negative losses of R400,000 for the period, compared to a profit of R72.6 million in 2022.

On a more positive note, VCP announced the first closing of the limited partnership Ditikeni Vunani Transformation Fund Partnership, focused on mid-sized corporates that align with transformation objectives. VCP also reported reduced operating expenses for the period, which included lower professional fees.

While the group encountered challenging economic conditions during the period, no interim dividend was declared. However, VCP expressed its commitment to rewarding shareholders by distributing free cash flow after considering its capital allocation requirements.