Thursday, 28 February 2013 14:31
Chinese-owned Yancoal Australia plans to cut costs and increase coal production after posting a 34 per cent increase in full year profit.
Yancoal said the short-term focus for the company was to reduce costs across all of its mines.
"Lower costs will underpin the future of each of the mines ensuring their longer term lives," the company said in a statement.
"Gains in this area are expected in 2013."
Coal production would increase in 2013 as Yancoal pressed on with expansion plans at some of its mines.
The company said it anticipates significant production growth when stage two of the Moolarben project and Ashtons South East Open Cut are commissioned.
Shares in Yancoal gained one cent to 84 cents at 1420 AEDT, Thursday.
Yancoal, which joined the local share market in June 2012 after merging with Gloucester Coal, recorded a full year net profit after non-recurring items of $404.6 million to December 31, 2012, up from $301.5 million in 2011.
Revenue was $1.41 billion, down 3.4 per cent from $1.46 billion.
The profit result included accounting items related to the adoption of the mineral resources rent tax (MRRT), transaction costs and foreign exchange movement on the outstanding loans.
Yancoal reported a $5.2 million fall in earnings to $197.9 million in 2012, down from $493.9 million in the prior year.
The fall was attributed to lower coal prices, a strong Australian dollar, increased operating costs and unused take or pay obligations for port and rail infrastructure.
Still, the company said it would continue to develop new coal markets and focus on increasing the amount of coal sold under longer-term contracts.
Yancoal is cautiously optimistic about the coal price outlook for both thermal and metallurgical coal after coal prices experienced lows in the cycle during the second half of 2012.
The company did not declare a full year dividend.
Earnings per share increased 7.1 per cent to 0.45 cents per share.
The result comes weeks after the company announced CEO Murray Bailey would not have his contract renewed when it expires on July 6.
Yancoal has already begun a search for Mr Bailey's replacement.
The company owns several operating thermal and coking coal mines, both underground and open cut, in NSW, Queensland and Western Australia.
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