Revenue surged on the back of the strong coal market for most of last year, climbing 94% to $A2.665 billion compared to $1.375 billion for 2007.
The impact of the strong coal market is evident by the production figures which were only 5% stronger in 2008 at 25.1 million tonnes while coal shipments were down 1.57% from 2007 at 25.1Mt.
Coal shipments of semi-soft coking coal increased 30% in 2008 to 4.62 million tonnes to take advantage of the strong prices of the commodity at the time while thermal coal exports shrank 5.39% to 19.28Mt and domestic thermal shipments fell 25.76% to 1.18Bt.
Coal & Allied managing director Bill Champion made the point that the company forked out $166 million in government royalties for last year compared to $67 million in 2007.
Of what to expect in 2009, Champion echoed the prevailing sentiment of the coal sector during the ongoing global financial crisis, saying thermal coal prices are likely to soften this year and the premium for semi-soft coking coal over thermal is also likely to narrow.
In a presentation accompanying the annual results, Coal & Allied said it was expecting increasing demand for thermal coal in nations such as South Korea to offset the decrease from other Asian nations.
The company also noted South Africa could possibly increase thermal coal supply to Asian markets as supply constraints ease and freight markets enable buyers to source coal from further away.
Coal & Allied has declared a final fully franked dividend of $5.50 per share for the year and ended 2008 with a net cash position of $525 million compared with net debt of $312 million in 2007.
Meanwhile, debt-heavy Rio Tinto has been linked by unfounded press reports to possibly selling its 76% stake of Coal & Allied to coal giant Shenhua Energy.
In December, Rio announced plans to cut back 14,000 jobs and net debt by $US10 billion by the end of 2009, with this figure implying the company may have to sell off some of its strongly performing assets.
Estimates on Rio’s stake of Coal & Allied have varied between $US3.72 billion and $US6.5 billion.
Details of the mining giant’s upcoming asset sales are expected to be revealed in the release of its full-year results on February 12.
Coal & Allied shares remain unchanged at $80.00.
