We have operated better than others in the current coal price environment and our Vlak operation has increased it's profitability over this period. There is no recognition of the impact of cash generation from the Penumbra operation which is now hitting its straps and for the most of FY2014 the company will benefit from it operating at full production rates with a cost profile of approx $50/t and a hedge program in place at $118/t - so even with low coal prices with an almost 500,000t of export sales that will likely contribute over $15m of cash flow.
Debt restructuring is ongoing and an announcement should be made very shortly on that, and will more than address his concerns on that. Debt only increased as a matter of the project financing of the Penumbra Mine with the debt to be repaid over the next 6 years. Short term debt is the convertible notes which we are in the process of restructuring.
On the positive, despite a 24% fall in revenue, and reduced gross profit, EBITDA and EBIT shoe 51% and 24% improvement, so we are managing a number of matters with appropriate cost reductions.
Non-cash Impairments on the assets is the appropriate thing to do in this market, given the decline in the coal price, outlook for the coal price and given that these assets are non-core and do not form part of the Company's immediate development plans.
Trust that this assists
CCC Price at posting:
3.4¢ Sentiment: ST Buy Disclosure: Held
