The South-Africa-focused company said it had made significant cost cuts during the 2013 financial year and would now slash fees paid to board members.
Non-executive director James Leahy has also agreed to step down.
“The company continues to look at ways that it can optimize its business activities, particularly in the wake of the current market environment and the impact that the fall in export thermal coal prices has had on our business,” Continental CEO Don Turvey said.
“We have reduced corporate administration costs for three consecutive years, marketing and other costs are at their lowest level in four years and finance costs are also at levels last seen in FY2011.”
The company’s administration costs in FY13 fell to their lowest level since 2010 at $9.5m, a 54% reduction on FY12 costs.
Finance costs for the financial year were $11.4m, a 44% reduction on finance costs of $20.1m in FY2012 and broadly in line with the $11.1m finance costs incurred in FY11.
Marketing and other costs of $3m in FY13 costs were a 70% and 78% reduction on marketing and other costs of $10.0m and $14.0m in FY12 and FY11 respectively.
“We have delivered these costs reduction over the past 12 months and during some extremely volatile market conditions. These initiatives will continue and we hope to be able to deliver further costs reductions in the coming year. I believe that the cost reductions will ensure the Company is well positioned for the future.”
As part of the cost reduction and business optimization initiatives, over the past quarter Continental has restructured its Perth office, reducing costs by about 70% by moving a number of the administration and finance responsibilities to existing personnel in South Africa.
The board of directors has also agreed to an immediate 25% reduction in non-executive director fees. Furthermore, the board has proposed that subject to shareholder approval, directors can elect to receive all or part of their fees in equity.
Continental said this would further reduce cash outflows and allow a greater proportion of the company’s cash reserves to be allocated to its projects.
Furthermore, James Leahy has agreed to step down from the board as a non-executive director with immediate effect.
“The board wish to thank Mr Leahy for his contribution over the past two years, particularly in assisting the company with its listing on the London Stock Exchange’s AiM Market and interaction with UK-based shareholders, which has resulted in a noticeable increase in UK-based shareholders and trading on the AiM market over the past year,” Continental said.
For FY13, the company reported revenue of $US62m, total production costs of $53m and a gross profit for the financial year of about $9m.
The company said it continued to host discussions regarding the sale of non-core assets and was still seeking a long-term offtake agreement and strategic partner for the De Wittekrans coal project, which is awaiting approval of a new order mining right.
For the final quarter of the financial year, Continental’s three operating mines produced 560,357t of run-of-mine coal, down 11% from the previous quarter’s record production level.
