Australian company, Coal & Allied Industries, which is majority owned by Rio Tinto, has announced profits for the 2008 calendar year up 631% to $804 million on the back of higher commodity prices and a weaker Australian dollar. However, the company is forecasting a weaker coal market this year.
Revenue during the 12 months to December 31 increased by 94% to $2.67 billion due to higher coal prices and a change in the sales mix, with a greater proportion of sales of semi-soft coking coal to maximise returns.
The company said higher input costs had adversely impacted the 2008 full year result with the company paying $166 million in government royalties in the year compared with $67 million in 2007.
Thermal and coking coal prices have increased amid infrastructure constraints on the east coast of Australia and increased demand from China, but a cutback in demand due to the global economic crisis is putting pressure on commodity prices.
Coal & Allied managing director Bill Champion said the company had benefited from record thermal coal prices and a weaker dollar but warned of tougher market conditions ahead.
''We will see more subdued markets in 2009 with thermal coal prices likely to soften compared with 2008,'' said managing director Bill Champion in a statement. ''As well, the premium for semi-soft coking coal over thermal prices also is likely to narrow.''
Coal & Allied has three operations in the Hunter Valley of New South Wales producing thermal coal, semi-soft coking coal and pulverised injection coal.
In terms of volume sales for 2008 were 1.4% lower than the previous year at 18.67 million tonnes, while full year output rose 5.1% to 18.61 million tonnes.
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