“The December 2008 record half-year result has been underpinned by strong export volumes and record export thermal prices. On the basis of current export prices and Centennial’s growing export component, the second-half result is expected to be similar to the first-half,” Centennial chief executive officer Bob Cameron said.

Underlying net profit for the six months to December 31 was $50.7 million, but an unrealised A-IFRS hedge accounting loss took a chunk of earnings, bringing net profit after tax to $42.7 million.

The record result was underpinned by an almost-50% increase in export volumes, benefitting from record export prices.

While production was only marginally below the prior corresponding period, it was 700,000 tonnes below expectations, primarily due to difficulties at the Angus Place mine.

Angus Place experienced problems of an extended longwall changeover due to commissioning issues on the new longwall – compounded by poor mining conditions in the Wolgan Zone.

The mine is now almost through the Wolgan Zone with conditions continuing to improve.

Mandalong’s performance during the half-year went from strength to strength with production of 2.52 million tonnes.

The New South Wales producer said Mandalong was on track to meet output expectations on the back of coal clearance and face operating-procedure improvements, as well as increased reliability from its new armoured-face conveyor pans.

Centennial has also introduced a fourth development unit at the mine to ensure longwall continuity.

The Springvale operation is now back on track to achieve its production targets for the remainder of the financial year, having met some unfavourable floor geology in the maingate roadway, which impacted output and costs at the beginning of the period.

During the half-year, Centennial had decided to suspend mining at Newstan earlier than planned due to the collapse in semi-soft prices.

The company’s export-orientated mines, Charbon and Clarence, both returned good results for the period with sales volumes ahead of expectations.

Centennial said Awaba made a useful contribution and Myuna is showing signs of improvement, while Mannering and Berrima incurred small losses.

Looking ahead, Centennial expects second-half run-of-mine production to be slightly above the December half as mining commences at the Ivanhoe North open cut. Longwall changeovers will take place at Newstan, Mandalong and Springvale.

Centennial said it continued to experience consistent demand for its coal, despite the economic crisis, as customers focus on supply security and take advantage of Centennial’s ability to ship through Port Kembla.

“Demand for thermal coal remains firm, albeit export spot and mid-year contracts have experienced a significant drop in pricing,” Centennial said.

Spot sales have recently been made at $US80, but export sales into Korea have been lower at $US70-75 as Queensland producers flood the market with PCI and semi-soft coal.

Centennial said whilst it was difficult to forecast in current volatile times, it expected to see consistent demand for thermal coal.

The miner has continued with its expansion and new development projects with design work progressing on a new haul road, rail overpass and upgraded coal-handling facilities at Mandalong.

Construction is expected to start in April and finish in early 2010, enabling Mandalong to begin exporting in the 2010 financial year.

At Airly, work is progressing on the design of the rail loop and surface infrastructure with first coal expected toward the end of the 2010 financial year.

The design of the upgrade to the Lisdale sliding train-loading facility is nearing completion. Construction is anticipated to be finished in early 2010.

As previously announced, Centennial is re-evaluating the mine design of its Awaba East project after the downturn in export prices reduced the benefit of fast-tracking the project.

Centennial was trading down 9.7% mid-morning today at $A2.15.