The diversified group yesterday posted a net profit of $391.9 million for the six months to December 31, 2006, down 12.3% on the previous corresponding period's $446.7 million.

Coal division earnings plummeted by $149.7 million, despite a good performance from the Curragh coal mine.

“We said in the 2005-06 full-year profit announcement that lower export coal prices and cost pressures would have a negative impact on profit in 2006-07,” managing director Richard Goyder said.

“But our main coal asset, the Curragh mine in Queensland, achieved a 23 percent increase in metallurgical coal sales and the Curragh North project remains on track for completion within budget.”

Earnings before interest and tax for the division fell 47.1% from the corresponding period to $168.1 million.

Price negotiations for Curragh mine metallurgical coal are continuing, with 65% of the 2006-07 contract volumes already settled.

Wesfarmers said it expects the mine to produce 6.2–6.5 million tonnes of the coal in 2006-07.

Overall, Goyder said it had been a good six months, with four of the six operating divisions recording improved profit results.