1/2 yearly out monday, page-4

re: 1/2 yearly - comment roidz ? SUMMARY ARTICLE:
not sure about the "WELL PUBLICIZED PROBLEMS AT NEWSTAN" - l dont remember them saying that 35 mil was lost previously!

Centennial Coal Company Limited (CEY) has reported net profit after tax (and minorities) of $3.1 million for the six months ended 31 December 2005. The half-year result was significantly impacted by the production issues experienced at Newstan during the period, as the mine traversed through a particularly difficult fault zone, the company said.

Group EBITDA rose by 65% to $67.4 million compared with the prior corresponding period, aided by a full six-month contribution from each of Mandalong, which commenced longwall production in January 2005 and Tahmoor, acquired in April 2005.

During the period, Centennial completed a full review of its resource base at Mandalong and Tahmoor with a resultant increase in reserves of 80% and 70% respectively.



Excluding the impact of Newstan, EBITDA would have been some $33 million higher at approximately $100 million, Centennial claimed.

The company said that while Newstan is now operating in normal conditions, the physical impact on the mine’s mechanical integrity continues to impact performance. Newstan is not expected to make a contribution to Group profitability until it commences mining on its next longwall block, which is scheduled to commence in April 2006.

As a result, Centennial said its second half is expected to deliver a substantially better profit performance than that of the first half, with the full year result currently expected to be in-line with that of FY2005.

MD Bob Cameron, said that while they were obviously disappointed with the impact of the well publicised problems at Newstan, we are pleased with the promise shown by the two latest additions to our portfolio, the new Mandalong longwall mine and the recently acquired Tahmoor coking coal mine.

“Given the improved outlook for the second half and the 2007 financial year, the Directors have maintained an unfranked interim dividend of 6c.

“Looking forward, we expect Group profitability to be driven by our larger mines over the next 18 months, with our exciting development project at Anvil Hill providing further earnings growth over the longer term,” he predicted.

In addition to the earnings growth anticipated from the Group’s portfolio of underground operating mines, Anvil Hill, as a low-cost open-cut operation due to commence mining in early 2008, will reduce mining risk and improve the Group’s long-term earnings, Centennial advised.

The company said that beyond FY2006, through a combination of higher coking coal prices, continuing strong thermal coal prices and increasing production and productivity, they would return a substantial uplift in profitability for FY2007.

Therefore, despite the substantial negative impact of Newstan in the current financial year, the Company’s earnings outlook remains positive for FY2007 and beyond, with Anvil Hill likely to add to Group earnings following commencement of production in FY2008, the company concluded.