Hargreaves set for positive year

COAL miner and energy services group Hargreaves Services today said it was poised for a positive year, despite suffering a fall in half year pre-tax profits.

The group, which owns Yorkshire’s Maltby Colliery and operates the Hatfield deep mine near Doncaster, published its interim results for the six months ended November 30 2011. Group revenue in the period increased by £68.9m from £253.9m to £322.8m, mainly as a result of higher commodity prices and higher shipments of coal to power stations.

Underlying operating profit for the group decreased by £2m or 9.8 per cent to £18.9m due to the scheduled face change and the lower coal yields from Maltby. Reported profit before tax decreased by 16.1 per cent from £16.1m to £13.6m.

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Chairman Tim Ross said: “The board expects that this will be another positive year for Hargreaves and we remain on track to deliver for the full year in line with management’s expectations. Our investment this year in developing our industrial, surface mining and energy and commodities businesses will reap significant benefits during 2012/13 and beyond. Next year, these new profit streams combined with the existing operations will allow us to generate significant profits and cash. This will give us an even stronger platform to drive the medium and long term growth that we are targeting in Europe and Asia.”

The company’s statement added: “As we indicated in our pre-close update, production at Maltby has continued to be challenging throughout the period as the production team moved to complete the geologically challenging T15 panel. Due to the poor yield of this panel we anticipate that our targeted production will be reduced by approximately 100,000 tonnes in the current year. The current panel is expected to be completed in October 2012. The next panel, T125, is over 2km closer to the shaft bottom and will be 50m wider at 400m. The coal in that panel is expected to be approximately 25 per cent thicker, which should significantly improve the yield.

“At an operational level the new working practices and new face equipment are performing as expected. We expect that our average contracted coal price will continue to improve as historical contracts are completed. The average coal price achieved at Maltby in the first half improved to £63.57 per tonne compared to last year’s average of £59.75.”

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