ATH delivers increased underlying profits

In the six months ended April 3 2011, the company reported revenue of £33.9m, compared with £34.4m the year before, on sales of 706,000 tonnes.

Operating profit before exceptional items was £1.7m, compared with a loss £300,000 in the same period last year.

Alistair Black, the chief Executive of ATH, said: “Despite the challenges faced by the group from rising gas oil prices and unexpected geological conditions at Glenmuckloch, underlying profit for the first six months was some £2m better than the previous year.

“With the Netherton site now fully developed the board had expected a typically strong second half performance, however, current mining conditions at Muir Dean and the presence of heat affected coal at Netherton suggest volumes will now be lower than expected for the full year. In view of the above, the board has decided to concentrate its mining effort on accessing higher quality, lower ratio coal. This has necessitated the write-off of a significant part of its work in progress balance and a reduced expectation for the year.

“The group expects that the impact on sales volumes will be increasingly offset by improved selling prices as we move forward and, consequently, the board remains confident in the medium and long term prospects for the business.”