“Clearly, the impact of Newstan (and the central coast restructure) together with Tahmoor’s lower than expected first-half performance has significantly overshadowed the strong positive contributions from Mandalong and the group’s western operations,” the company said.

Despite the company’s first-half loss, Centennial has retained a quiet confidence in its future profitability and growth prospects.

“This confidence is based on a number of factors, including: the strong performances from Mandalong and the group’s western mines; the expected improvements following the central coast restructure; the installation of a new main fan at Tahmoor in the June 2006 quarter; and the anticipated development of Anvil Hill.”

Centennial’s equity share of run of mine (ROM) production for the six months to December 31, 2006 was 9.4 million tonnes, 30% above the prior corresponding period, mainly attributable to Newstan’s return to consistent longwall production.

Sales for the six months were 8.8Mt, 26% above the prior corresponding period, with increased domestic sales underpinned by significantly higher production from Newstan, Angus Place and Mandalong.

Despite the first-half loss, the company expects to return a full-year profit in accordance with previously provided guidance, (within the range of $45–55 million), minus the $34 million after tax.

Centennial said it was confident the company would return a substantial uplift in profitability for the 2008 financial year, through a combination of:

• Continuing strong thermal coal prices and strengthening coking coal market fundamentals;

• The installation of a new main ventilation fan at Tahmoor (currently the mine’s major impediment to increased production); and

• Increasing production and productivity at the group’s key operations (including Mandalong and Tahmoor).