Mandalong, Angus Place help offset Centennial's production shortfall

IMPROVED performances at Centennial Coal’s Angus Place and Mandalong collieries have partly offset the effect of the closure of its Newstan colliery and production difficulties at its Springvale colliery, leading to the company reporting annual sales of 13.8 million tonnes for the 2010 financial year.
Mandalong, Angus Place help offset Centennial's production shortfall Mandalong, Angus Place help offset Centennial's production shortfall Mandalong, Angus Place help offset Centennial's production shortfall Mandalong, Angus Place help offset Centennial's production shortfall Mandalong, Angus Place help offset Centennial's production shortfall

The Mandalong face. Photo by Silky Oaks Video Productions.

Lou Caruana

The production figure, down 4% year-on-year, is expected to be higher in 2011 despite the lower planned production from Mandalong which will have two longwall relocations during the year.

Angus Place has no longwall relocations planned for the year and Springvale will have one relocation mid-year. There will be a full year of production at Airly with a second production unit commencing in the second half.

“The 2011 sales mix envisages an approximate 25 per cent uplift in export shipments when compared with 2010, as Mandalong has access to export infrastructure for the full year and Airly ramps up,” the company said.

Sales revenue from operations for the year ended 30 June, 2010, was $A800.1 million, a decrease of 10% year-on-year.

This decrease in revenue is mainly due to lower US dollar export coal prices and the appreciation of the Australian dollar, but partly offset by improved hedging results and a 6% increase in export sales volumes to 4.4Mt.

Centennial, which is awaiting FIRB approval for a friendly $2 billion takeover by Thai energy group Banpu, returned a profit before tax of $49.3 million for the year compared to $95.4 million for the 2009 financial year.

The profit includes an unrealised foreign exchange hedge accounting loss of $2.5 million. On a normalised basis, Centennial returned a profit before tax of $51.8 million ($53.3 million after tax) compared to the prior year of $110.8 million ($82.0 million after tax).

ROM production from the company’s Northern Operations at 8.2Mt was impacted by the closure of Newstan but closing stocks in the Northern Region of 234,000t were higher than planned and will be shipped into the export market in the next financial year.

Lower export coal prices resulted in the Northern Operations recording a profit decline of $23.8 million compared to the prior year.

ROM production from the company’s Western Operations at 6Mt was marginally above the previous year, although below plan mainly because of production difficulties at Springvale and mining lease extension delays for the open cut at Charbon.

Lower export coal prices resulted in the Western Operations’ profits declining by $42.8 million (inclusive of hedging) compared to the prior year.

Centennial directors today lodged a statement with the Australian Securities Exchange reaffirming their unanimous recommendation that Centennial's shareholders accept an offer from Banpu of $6.20 a share for all Centennial shares not owned or controlled by the Thai company.

Centennial’s shares were down by 1c to $6.03 in morning trade.

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