Optimum Coal suffers profit slump

[miningmx.com] — South Africa’s Optimum Coal Holdings, which listed in March this year, on Wednesday reported a drop in full-year headline earnings, hit by lower export prices for coal and the stronger rand.

Optimum Coal reported headline earnings per share for the year to the end of June of 29c, compared with 506c the previous year. The figure falls below Optimum’s forecast range of 40c to 50c because an expected tax benefit did not happen.

Headline earnings are the main profit gauge in South Africa and strip out certain once-off, financial and non-trading items.

Optimum said attributable coal production rose 17 percent to 10.8 million tonnes of saleable coal during the financial year, while attributable export coal production increased by 30 percent to 5.3 million tonnes. Some 5.5 million tonnes of Optimum’s coal went to state-owned power utility Eskom.

The output figures include tonnages from the Koornfontein Mine, of which the company took control earlier this year.

Optimum Coal said as the fourth largest shareholder at the Richards Bay Coal Terminal and one of South Africa’s largest producers it was well positioned to benefit from increased demand for thermal coal, both locally and internationally.

The company estimates a run of mine production from Optimum Collieries of between 15-16 million tonnes for the current financial year to the end of June 2011, with up to 6 million tonnes going for exports and 5.5 million tonnes to Eskom.

Koornfontein Mines are expected to produce up to 1.8 million tonnes of exportable coal and 1.2 million tonnes for Eskom or lower quality inland markets.