The result represents the first-time contribution of the Powercoal operations, purchased in August last year from the NSW State Government. Through the long-term contracts these mines have with the NSW Government-owned electricity generators, the company now supplies almost 40% of the State’s energy coal requirements.

The ex-Powercoal mines contributed 60% of the Company’s earnings before interest and tax. Earnings before interest, tax, depreciation & amortisation (EBITDA) rose from $44.2 million to $98.7 million, whilst earnings before interest & tax (EBIT) rose from $31.7 million to $63.2 million when compared with the previous year.

Raw coal production under management grew to 13.5Mt and sales rose to 13.3Mt. The Springvale, Newstan and Myuna mines logged new production and productivity (tonnes per man) records for the period. These three mines, along with Angus Place and Clarence contributed almost 90% of company profitability.

Newstan, the Company’s largest mine, performed well and was the largest contributor to earnings. Angus Place achieved a record 11,000 metres of annual development in preparation for the next longwall changeover to the longer 3.5 km blocks in the southern area of the mine.

Myuna bord and pillar mine also achieved record productivity, despite ground control problems.

Mining at the Cooranbong bord and pillar mine stopped earlier this month as a result of the exhaustion of reserves and work will now concentrate on the development of the Mandalong longwall.

After reviewing the development plans for Mandalong the company has decided to reduce the width of longwall blocks with the first two planned to be 115 metres wide.

Centennial said this would reduce surface impacts and the development risk of the mine.

Major plant capital expenditure is expected to be lower than originally expected, although additional development driveage will reduce this saving. Mandalong will predominantly service its two new supply contracts to Delta Electricity’s Vales Point and Eraring Energy’s power stations, totalling 3 million tonnes per annum

Once fully operational from 2005-06, Mandalong is expected to become the Group’s largest contributor to profitability.

“This is a record result for Centennial Coal and our ninth consecutive profitable year since listing in August 1994,” said Bob Cameron, Centennial Coal’s managing director.

“The acquisition of Powercoal has confirmed the merits of the Group’s consistent strategy of seeking long-term, A$ domestic contracts to underpin our business. During the year, we strengthened the Company’s senior management team and successfully integrated the ex-Powercoal Mines into the Centennial business model.

“We have already seen an improvement in the productivity of these mines. Our expectation is that with targeted capital expenditure, such as the upgrade of the main conveyor system at Angus Place, productivity and costs will continue to improve, enabling us to increase margins and therefore Shareholder Value.”