Coal’s price collapse has knocked millions off Anglo Pacific Group’s (APF) earnings in the first half, in a turnaround on its 2019 results. Both the energy coal and steel-linked metallurgical coal prices came off as demand dropped in Asia. Anglo Pacific said its first half revenue would be £18.5m-£19m, a 43 per cent drop year-on-year.
The company’s shares were down 8 per cent on the trading update, to 119p.
Chief executive Julian Treger said weaker Chinese demand and Indian import restrictions had cut coal prices in the June quarter, but predicted a better second half. Anglo Pacific has maintained its quarterly dividend at 1.75p.
The company buys royalties on mining projects that grant it a percentage of revenues. Its biggest earner is the Kestrel metallurgical coal mine in Australia. It also has vanadium, iron ore and copper. While the iron ore price surged in recent months, the impact for Anglo Pacific’s holding in the Labrador Iron Ore Royalty Corp (Can:LIF) was limited because the miner (a separate company LIORC owns a stake in) spent up on capital works in the half. The royalty company’s net debt increased 42 per cent between the end of 2019 and 30 June, to £40m.
