RJB Mining PLC, the UK's leading coal mining company, has announced preliminary results for the year ended 31 December 1999. Profit before tax and exceptional items for 1999 was £11 million on turnover of £699 million (1998: £50 million, on turnover of £823 million). Earnings per share before exceptional items were 7.4 pence per share (1998: 22.8 pence per share, before exceptional items).
The company said reductions in current generator contracts and prices had impacted on the sales volumes and profitability for 1999. It also predicted a recovery in international coal prices from the 25 year low of 1999.
Commenting on the results, John Robinson, Chairman of RJB Mining, said: "The trading climate remains demanding, and as predicted in the half year statement, it proved very difficult to secure new sales orders against a background of low international spot prices, (which are Currently improving), and the continuing strength of sterling.
"The publication of the 1999 results was delayed in the anticipation that the Government would be in a position to make a decision on transitional state coal aid support for the UK industry. We believe that we have presented a strong case for such support and that this is currently receiving serious consideration. We are disappointed that this decision has not been made by now.
"The Board's strategy remains to match production to sales, maintaining investment in sustainable operations and to focus on returning cash to shareholders.
"We have in place contracts for coal sales in 2000 with volumes and prices at much the same levels as for 1999, which should enable the Company to continue to generate substantial operating cashflows."
Production from RJB's underground mining operations dropped from 19.8 million tonnes in 1998 to a total of 17.5 Mt. Geological problems affected the Selby Complex while at Stillingfleet the number of working areas was reduced to lessen geological risk and improve efficiency. At Wistow and Daw Mill Collieries, difficult geology hampered operations in the last quarter of the year and would continue to affect production into the first quarter of 2000.
Major investment to improve underground transport systems continued at Daw Mill and Kellingley Collieries. Capital investment of £32 million was approved to access and develop new areas of coal at the Prince of Wales and Riccall mines.
The Calverton Colliery was and two further collieries, Clipstone and Ellington, were expected to be closed during 2000. RJB said the closure of these collieries was in response to current market forces, and the company's commitment to continue to match production to sales.