New World Resources nine-month coal production stable, sales slip on year
London (Platts)--14Nov2012/1055 am EST/1555 GMT
Central European hard coal and coke producer New World Resources (NWR)
reported coal production of 8.6 million mt in the nine months ended September
30, on par with the previous year, although external sales amounted to 7.2
million mt, a 10% drop from 2011, it said Wednesday.
External coal sales consisted of 3.8 million mt of coking coal (47%
mid-volatility hard coking coal, 46% semi-soft coking coal and 7% PCI),
climbing 8% year on year, and 3.4 million mt of thermal coal, a 25% decrease
from the same period in 2011.
The miner reported an end-of-period inventory of 1.3 million mt, almost
tripling from the 457,000 mt reported at the end of the same period in 2011.
NWR also reported coal segment revenues of Eur916 million ($1.2
billion), slipping 20% year on year, due to retreating coking coal prices and
lower thermal coal volumes.
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The average realized price for coking coal for the nine-month period was
reported at Eur131/mt, a 28% fall, although thermal coal prices, at Eur73/mt,
were 12% higher than in 2011.
"Trading conditions remained challenging in the third quarter. In an
environment where coking coal prices are 30% down year-on-year, our focus
will remain on cost containment and watchful management of capital spending
in order to ensure we are well positioned for the future," NWR executive
director and CFO Marek Jelinek said in the results.
He said weakness in the steel industry is having a knock-on effect on
raw materials such as coking coal, which was reflected in its pricing for the
fourth quarter. At Eur102/mt, prices are down 20% from the previous quarter.
FULL-YEAR PRODUCTION SEEN AROUND 11 MILLION MT
NWR said it expects coal production of between 11 million mt and 11.1
million mt for the 2012 financial year, slightly down from the 11.2 million
mt produced in 2011. Year-end coal inventories are expected at
It added that external sales for the year are expected to be between
10.2 million mt and 10.3 million mt of coal, also falling from 10.6 million
mt sold last year. It said the split should be about 50% coking coal and 50%
Jelinek said that, looking ahead, despite some positive signs, the miner
expects the situation in Europe to remain volatile in 2013 and is therefore
preparing more efficiency measures at its current operations.
"Although economic growth in key emerging markets such as China or India
has moderated, they remain robust as these countries progress with continuing
investment in urbanization, which underpins an improving sentiment towards
raw materials for steel production in general," he said.
Meanwhile, the producer's coke production amounted to 525,000 mt in the
nine-month period, a 10% drop, with external sales at 432,000 mt, stable year
As a whole, the producer reported consolidated revenues of Eur1 billion
from January to September, down 18% from the same period last year, primarily
due to lower coking coal prices, EBITDA of Eur227 million, falling 39% and
profit of Eur47 million, dropping 61% year on year.
--Jacqueline Holman, email@example.com
--Edited by Jonathan Fox, firstname.lastname@example.org