News: Hargreaves sees lower contribution from Maltby
Hargreaves Services plc, the UK's leading energy support services provider and owner and operator of Maltby Colliery in Rotherham, has announced that it remains confident of achieving our full year profit targets despite underperformance at Maltby.
In the interim results for the six months ended 30 November 2011, the Durham-based group stated that the impact of poor coal yields from a thin coal section at Maltby is likely to impact full year production.
Revenues were up 27.1% to £322.8m compared to the same period the previous year but pre-tax profits dropped over the same period by 16.1% to £13.6m.
During the period, production at Maltby moved to a new coal face and a reduced coal yield from this face resulted in a lower contribution. This resulted in the underlying operating profit for Hargreaves decreasing by £2.0m or 9.8% to £18.9m.
The coal production from the new coal panel has been disappointing due to geology and the group stated that targeted production will be reduced by approximately 100k tonnes in the current year.
The current panel is expected to be completed in October 2012, after which, miners will move onto a new panel where coal is expected to be approximately 25% thicker, which should significantly improve the yield.
The group has committed an additional £2m to facilitate production of an additional 50m of the new face.
The average coal price achieved at Maltby in the first half improved to £63.57 per tonne compared to last year's average of £59.75.
A spokesperson for Hargreaves, said: "Maltby has continued to underperform but the outlook for the mine improves significantly as contracted sales prices increase and the operation moves to the next production panel that will benefit both from thicker coal and being closer to the pit bottom.
"Strong performances across the rest of the divisions combined with the expectation of coal production at Tower [in South Wales] commencing before the end of the financial year provide opportunities to offset the impact of Maltby.
"We will continue to manage Maltby carefully through the remainder of this current panel."
Maltby occupies a site of 500 acres and employs over 500 staff and contractors. It is the last coking coal mine left in the UK and produces both high quality coking coal and power station coal.
Hargreaves website
Images: hargreavesservices.co.uk
In the interim results for the six months ended 30 November 2011, the Durham-based group stated that the impact of poor coal yields from a thin coal section at Maltby is likely to impact full year production.
Revenues were up 27.1% to £322.8m compared to the same period the previous year but pre-tax profits dropped over the same period by 16.1% to £13.6m.
During the period, production at Maltby moved to a new coal face and a reduced coal yield from this face resulted in a lower contribution. This resulted in the underlying operating profit for Hargreaves decreasing by £2.0m or 9.8% to £18.9m.
The coal production from the new coal panel has been disappointing due to geology and the group stated that targeted production will be reduced by approximately 100k tonnes in the current year.
The current panel is expected to be completed in October 2012, after which, miners will move onto a new panel where coal is expected to be approximately 25% thicker, which should significantly improve the yield.The group has committed an additional £2m to facilitate production of an additional 50m of the new face.
The average coal price achieved at Maltby in the first half improved to £63.57 per tonne compared to last year's average of £59.75.
A spokesperson for Hargreaves, said: "Maltby has continued to underperform but the outlook for the mine improves significantly as contracted sales prices increase and the operation moves to the next production panel that will benefit both from thicker coal and being closer to the pit bottom.
"Strong performances across the rest of the divisions combined with the expectation of coal production at Tower [in South Wales] commencing before the end of the financial year provide opportunities to offset the impact of Maltby.
"We will continue to manage Maltby carefully through the remainder of this current panel."
Maltby occupies a site of 500 acres and employs over 500 staff and contractors. It is the last coking coal mine left in the UK and produces both high quality coking coal and power station coal.
Hargreaves website
Images: hargreavesservices.co.uk
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