For the first half of fiscal 2007, Macarthur’s net profit dived to $42.4 million, from $82.1 million in the previous corresponding period.
“Macarthur Coal's profits were primarily affected by the 30 percent reduction in the US dollar coal price in April 2006 from the record previous price," Macarthur CEO Nicole Hollows said.
Despite the result, Hollows confirmed a profit guidance of $63–73 million for the full year and said the company also expects to meet its 4.5 million tonne annual shipping target, subject to no further interruptions caused by rain or port congestion.
But considering the ongoing port congestion at Dalrymple Bay Coal Terminal and weather forecasts of continued rain, Hollows didn’t sound too convinced herself that targets would be met.
“The forecast is highly sensitive to wet weather and any further delays at DBCT,” Hollows said.
“The congestion and throughput at Dalrymple will make it difficult for us to achieve the 4.5Mt target.”
Also adding doubt were the first-half sales of 2.13Mt, down 10.7% on the previous corresponding period.
Overall, Hollows said the company was focusing on cost control measures and maintained that Macarthur was in a very good position with strong cash flow, low debt and undrawn loan facilities.
Hollows said the company was also considering developing new operations and expanding current operations to fill the increasing port allocation over the next few years.
“Additionally, we have recently put in place a three-year contract for the supply of large tyres to our operations at a price considerably less than the spot price for tyres,” she said.
“This, along with our increased port allocation at Dalrymple Bay Coal Terminal, upgraded water supply and the commissioning of our new electric shovel later in the year, has ensured we are positioned to maintain sustainable operations.”
Meanwhile, the ongoing corruption saga involving ex-Macarthur Coal CEO Ken Talbot has prompted chairman Keith De Lacy to refute certain claims, despite saying last year that the company would make no further public comment.
De Lacy dismissed any suggestion of a link between the loans made by Ken Talbot to former government minister Gordon Nuttall and an arrangement with the Government to relocate the Transport Infrastructure Corridor at Coppabella Mine.
He said the arrangement, which facilitated the relocation of the government infrastructure (road and rail) at the mine, was a commercial one and was backed by a bank guarantee from the Macarthur Coal group’s financiers.
“The arrangement was negotiated between officials from Macarthur Coal and officers from the Treasury Department and DSD. It wasn’t even a cabinet decision,” De Lacy said.
“Mr Talbot remains a director of Macarthur Coal and we retain confidence in him.
“It is business as usual at Macarthur Coal.”