The loss of up to $2 million for the December half was mainly attributed to the rise in the Australian dollar relative to the US dollar. A 5.5 cent rise in the A$/US$ exchange rate since the date of the last profit forecast has reduced the annual net profit after tax forecast by $6.4 million.
A production shortfall at Coppabella and increased demurrage charges also impacted profit margins. Coppabella was hit by recent heavy rain in Central Queensland and pit flooding has prevented access to coal.
The company said all available pumps were being used to dewater pits and access to coal is expected to be achieved in 12 days time provided the weather remains dry. Force Majeure has been declared and management is working with customers to minimise the impacts.
The reported production shortfall at Coppabella for the 2004 financial year of 200,000 tonnes may now be as much as 347,000 tonnes.
Moorvale production was not impacted by the recent rain event. Production has now been upgraded from 1,000,000 tonnes to 1,500,000 tonnes for 2003/2004, however thermal coal production will be higher than normal.
A significant profit increase is forecast for the second half of the financial year, representing net profit on an annualised basis of $16 million to $19 million. The boost is due to increased attributable tonnage due to Moorvale becoming fully operational; US$ coal price increases; demurrage reverting to normal levels; and reduced coal preparation fees.
The revised forecast is based on a 77 cent A$/US$ exchange rate for the second half of the year; undelivered Japanese Financial Year (JFY) 03 contracted tonnage being sold at JFY 03 prices in JFY 04; and no further production disruptions at Coppabella.
Macarthur said improved profitability for the 2004/2005 financial year is expected. Macarthur Coal’s attributable production will increase to approximately 4.5Mt and a substantial US$ price increase for low volatile PCI coal will take effect for the majority of JFY 04 contracts.
Negotiations for the engagement of a second contractor at Coppabella are well advanced and management is confident of achieving its production target for 2004/2005.
