Centennial Coal annual net profit down 29pc to $17.1m12:26,...

Centennial Coal annual net profit down 29pc to $17.1m
12:26, Thursday, 17 August 2006

Sydney - Thursday - August 17: (RWE Australian Business News) -
Centennial Coal Company Ltd (ASX code: CEY) net profit fell 29 per cent
to $17.1 million in the year ended June 30 from $24.2 million for the
previous year.
As foreshadowed, the result was hit by a pre-tax loss of $47.8
million at the Newstan mine as the longwall traversed a severe fault
zone, which then led to major equipment reliability issues and the loss
of 2.0 million tonnes of coal production from the mine.
Excluding significant items and discontinued operations, net
profit was up 30 per cent to $50.6 million from $38.9 million.
Revenues rose 24 per cent to $807.9 million from $650.5 million
with higher export coal prices and a change in sales mix with the
addition of hard coking coal contributing to the revenue growth.
Sales volumes were just ahead of last year, despite the
production issues at Newstan, due to the full-year contributions from
Mandalong, Tahmoor and Mannering.
Demand for coal has remained strong in both the export and
domestic markets.
Basic earnings per share were 6.0c, down from 11.7c.
Final dividend is a steady, unfranked 7c, payable on October 6
to shareholders registered September 22.
Total payout for the year is 13c, unchanged from last year.
Centennial's dividend reinvestment plan will continue to apply
with a discount of 2.5 per cent.

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Other adverse impacts on the year's result were Tahmoor's
revenues being constrained by low-priced "carry-over" tonnage arising
from prior-year operational problems, poor geological conditions at
Mannering during its development phase and reduced production at Myuna
as it transitioned out of the Great Northern Seam to the Fassifern Seam.
Due to the commodity boom, the group's cost structure has been
hit by rising prices for inputs and a drop in standards generally by
contractors as a result of significant demand for their services and a
general skills shortage.
With Newstan's severe problems now behind it and the mine back
in production, Centennial's major mines have performed well since year
end (although Tahmoor is on its longwall rampdown as it moves to LW24).
Several mines, including Mandalong, Angus Place and Springvale,
are operating at record levels, demonstrating the value of Centennial's
targeted capital expenditure, which has seen significant improvement in
productive capability and reliability.
During the first half of the 2007 year, Centennial will only
have two longwall changeovers - Tahmoor, which is about to commence, and
Mandalong, scheduled to start in September.
Shares in Centennial today rose 5c to $3.35.