For the period ended September 30, the company reported net income of $US47.1 million, a massive jump from its net loss of $8.8 million in the same period of 2007.
Grand Cache noted that the figure, however, was impacted by the inclusion of $10.2 million for a future income tax benefit realised based on a future taxable earnings projection.
Revenue was up 149% to $76.6 million versus last year's second-quarter result of $30.8 million.
Average sales prices were also up significantly to $223 per tonne in the quarter, compared to the comparable period’s $85/t – the result of current coal year contract settlements that have been offset by calendar year contracts and carryover tonnage from last coal year.
Officials for Grand Cache said production was less than expected in the second quarter due to an “extended period of development” for its underground mine, an issue which caused a temporary reduction in coal volume. The development is expected to last until mid-November.
As a result of the obstacle, the producer cut its 2009 coal sales volume guidance to 1.5-1.65 million tonnes, down from 1.8-2Mt, numbers which will be subject to the start date of depillaring at its underground mine, the appropriate level of rail service and timely shipping.
“The corporation anticipates the average sales price for fiscal 2009 will be in the range of $210 to $220 per tonne, down from the previous guidance range of $245 to $255 per tonne,” Grand Cache said.
“The decrease is a result of having a higher proportion of lower priced coal, which consists of carryover tonnage from the prior year and contracts settled on a calendar year basis, and a lower proportion of current coal year contracts, which will be carried into fiscal 2010.”
Company president Robert Stan elaborated on the issues and the mine’s short-term outlook, noting that the underground complex returned to the development phase when additional coal was detected.
“Although this temporarily reduces our coal production in the current year, it has a positive long-term impact as more coal is available for recovery from the underground mine,” Stan said.
“We will continue to take necessary steps to improve production in the current year, while making decisions that maximise overall coal recovery."
Stan also noted that the guidance revision will mean that carryover tonnage will exist going into the fiscal 2010 year.
“This will decrease the average US sales price for fiscal 2009, [but] the recent weakening of the Canadian dollar against the US dollar should help mitigate the impact on our net income this year," he said.
