Macarthur Coal Full-Year Profit Falls on Declining Prices, Japanese Demand

Macarthur Coal Ltd., the world’s largest producer of pulverized coal, said full-year profit fell 26 percent as prices of the fuel used by steelmakers and sales to biggest customer Japan declined.

Net income dropped to A$125.1 million ($111 million), or 49.3 cents a share, for the period ended June 30 from A$168.2 million, or 79 cents, a year earlier, Brisbane-based Macarthur said today in a statement. Sales fell 4 percent to A$670.50 million.

Coal prices fell during the year as the global financial crisis crimped demand, Macarthur said in a presentation. Goldman Sachs & Partners Australia Pty analyst Malcolm Southwood cut his forecast for pulverized coal for the calendar fourth quarter by 8.3 percent to $165 a metric ton, citing weakening demand.

Macarthur shares were halted from trading today, pending the company’s fundraising plans. The company plans to raise about A$400 million selling shares to institutional investors to fund the acquisition of additional reserves close to its mines in Queensland, the Australian Financial Review reported.

The full-year profit compares with the company’s July 6 profit forecast of as much as A$125 million, excluding accounting adjustments. While sales to Japan fell 13 percent to A$168.9 million during the period, revenue from China doubled during the year to A$105.9 million, according to the statement.

“China is increasingly seeking high-quality coking coal imports, and that process is going to continue as smaller mines in China are forced to close,” Chief Executive Officer Nicole Hollows said during an analyst call.

Second-half net income was A$85.4 million, according to numbers derived by Bloomberg from full-year earnings, up 36 percent from A$62.6 million a year earlier.

Macarthur, which this year rejected takeover offers from Peabody Energy Corp. and New Hope Corp., will pay a final dividend of 17 cents a share. The company had A$249 million of cash as of June 30.

To contact the reporter on this story: Elisabeth Behrmann at Ebehrmann1@bloomberg.net

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email