Excluding the sales of the Anvil Hill development and Austral Coal in the 2008 financial year, the net profit after tax was a record for the New South Wales producer.
Centennial attributed the result to a 36% increase in export volumes and record export prices.
The results were, however, hurt by volatility in financial markets with an unrealised hedge accounting loss of $6.9 million and an $8.5 million charge relating to the early suspension of operations at the Newstan longwall.
Centennial produced 15 million run-of-mine tonnes for the year and sold 14.4Mt as its export mines performed well, with records from Charbon and Clarence. The Mandalong longwall also had a stirling year.
Mandalong set a production record of 4.9Mt for the year and is now targeting 5.5Mt for the 2010 financial year.
It wasn’t all rosy news though, with the Newstan mine being closed earlier than anticipated following the sharp fall in semi-soft coking coal prices, costing the producer $23 million in revenue.
Production at Angus Place was affected by equipment commissioning issues on the new longwall during the year to the tune of $3 million. However, the mine is now looking up, posting monthly production records in the last two months, with more than 400,000t in July.
Centennial today announced it would relinquish ownership of the Berrima mine on August 31 and was finalising the sale of the mining assets with the leaseholder.
Centennial said the small mine had incurred a loss for the year and had struggled with difficult mining conditions, a lack of scale and low contract price.
It assured that some of its other, smaller mines which operated at a loss, including Mannering and Myuna, would not be closed due to their contribution in releasing coal for export from other mines.
Mining costs increased during the year as Centennial put on additional workers at its export mines, which it says are already delivering higher production.
The higher costs were also associated with the impact of the mining boom, creating strong demand for mining services and supplies. With the situation now altered, Centennial said it was negotiating new arrangements with suppliers where possible.
Looking ahead, Centennial said it expected production in the 2010 financial year to be marginally higher, despite losing Newstan.
Ground would be made up with higher planned production at Mandalong, normal output levels at Angus Place and the contribution of new mine Airly towards the end of the 2010 financial year.
There are currently 100 workers onsite constructing the Airly mine, with earthworks well advanced for the rail loop, which is being extended in preparation for the surface conveyors to link the mine entry with the stockpile and rail.
Construction on the tunnel reclaim system is advanced, with the concrete culvert section forming the tunnel now in place. The overall project is now more than half complete.
At Mandalong, the haul road linking the mine to Newstan is underway with clearing of a 3.5km road corridor complete and bulk earthworks 40% complete. Detailed design of a rail bridge is nearing completion with some supplies ordered.
An upgrade of the Cooranbong coal handling facility is also continuing.
The two projects will allow Mandalong to export up to 1Mt in the 2010 financial year.
“Looking forward, Centennial is well placed to capitalise on our export growth strategy, with Mandalong and Airly to enter the export market in the second half of the 2010 financial year,” Centennial managing director Bob Cameron said.
Centennial was trading up 3.6% mid-morning today at $3.44.
