Operations at Wambo, Metropolitan and Chain Valley remained on track during the March quarter to achieve planned sales and production for the year.

 

Excel said higher coal prices were generating improved margins in the last quarter of FY2004 and the company now expects to exceed its 2004 profit forecast of $22.7 million attributable to shareholders.

 

For coking coal, average US$ export prices are expected to be approximately 7% higher

than the prospectus forecast, representing an increase of some 35% over average FY

2004 prices.

 

For thermal coal, average US$ prices are expected to be approximately 13% higher than

the prospectus forecast, representing an increase of more than 70% over average FY

2004 prices.

 

Excel estimated the new royalty regime will have a negative impact of approximately $4 million on profit in FY 2005.

 

Production and sales at Metropolitan ran above planned levels for the quarter and are on track to achieve FY 2004 targets.

 

Metropolitan is currently moving its longwall to the next longwall panel, which will be the first longwall block to be extracted with the longwall face widened from 135 metres to 158 metres. Excel reported the move was proceeding well.

 

Exploration and environmental impact studies have commenced at Wilpinjong in preparation for the lodgement of a Development Application in 2005.

 

Excel shares closed yesterday at $2.16.