Eastern European coal miner New World Resources achieved total coal production of 5.8m tonnes in the first half, which was 7 per cent higher than in the corresponding period last year. However, chairman Mike Salamon warns of peaking coking coal prices and also expects mining unit cash costs to rise 10 per cent this year.
Since April, coking coal sales have been priced on a quarterly basis in line with international markets. Prices agreed for third quarter delivery of €192 (£168) per tonne are 9 per cent lower than in the previous quarter, and Mr Salamon expects fourth quarter prices to fall further. However, he asserts that the pricing environment remains strong, even if prices may have peaked.
Steel production is the underlying driver of coking coal demand. Despite the uncertain macroeconomic environment in Europe, Mr Salamon confirms that the company hasn't yet seen any evidence of a slowdown in its markets.
Looking longer term, the company has approved the 190m tonne Debiensko project in Poland, which is expected to contribute two million tonnes per year by 2018. This will represent some 15 per cent of total production and, with the Czech operations getting deeper and more expensive to mine, is vital to the company's continued growth.
Prior to these results, the market consensus was for full-year EPS of 114¢.
| NEW WORLD RESOURCES (NWR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 556p | MARKET VALUE: | £1,465m | |
| TOUCH: | 551-560p | 12-MONTH HIGH: | 1,149p | LOW: 460p |
| DIVIDEND YIELD: | 6.0% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 317¢ | NET DEBT: | 48% | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 716 | 107 | 41.0 | 21.0 |
| 2011 | 840 | 120 | 32.0 | 16.0 |
| % change | +17 | +12 | -22 | -24 |
Ex-div: 31 Aug Payment: 30 Sep £1=€1.144 | ||||
