For the year ended December 31, 2006, UK Coal reported an overall profit of about £17 million ($US33 million), including additional gains on the revaluation of property of £50 million which will be recorded in the consolidated income statement for 2006.
Excluding additional property gains, as the company expected, losses in the period before taxation are estimated to be around £33 million, largely attributable to the difficulties encountered in deep mining in the third quarter.
Deep mines were marginally profitable in the three months to December, with annual 2006 output of 8.9 million tonnes.
The Daw Mill operation had the best figures producing 2.7Mt and Kellingley recorded output of 2.1Mt.
“Within deep mines, exceptional costs in the year are anticipated to be around £20 million, including a credit for Coal Investment Aid of £7.8 million, principally comprising costs of mothballing Rossington and Harworth and costs incurred at Maltby colliery during Q3 when production was halted as a result of a roof fall,” the company said.
“At January 1, 2007, some 17.7Mt of the group's contractual supply obligations remained outstanding at prices of up to £1.48 per GJ [plus retail price indexation for later years] dependent partly on the outturn of international coal prices.”
Surface mining profit is expected to be £4.8 million on output of 600,000t.
“Overall the group is well placed to deliver further value for shareholders in the coming year and will continue to focus on realising the significant potential within its property portfolio, reducing the risk profile of its deep mining operations and capitalising on opportunities in power generation,” UK Coal said.
