Mining group New World Resources swung to a bigger than expected loss
in the second quarter of 2009 and halted its first-half dividend
payment to keep cash as it pulls out of the worst of the
economic crisis. NWR, owner of the Czech Republic's largest hard coal mines,
showed a 39.3 million euro loss in April to June due to falling
sales and production after making a 71.3 million euros net
profit in the same period last year. Analysts had on average expected a loss of 18.3 million
euros. Shares in NWR fell more than 6 percent at the open and were
trading down 4.5 percent at 138.8 crowns by 0723 GMT. "Overall the numbers came out at the bottom range of the
consensus," said Bram Buring, an analyst with Wood & Co. "The
negative surprise is stemming primarily from depressed coke
prices in Q2." Revenue at the Prague, London and Warsaw-listed firm fell to
243.9 million euros from 463.1 million a year ago, missing a
forecast of 268 million. The results included discontinued operations, the company
said. "Market conditions were difficult for NWR throughout the
first half of this year. The steep decline in central European
steel production led to a contraction in demand for our coking
coal and coke," Mike Salamon, NWR's chairman, said. Coal production in the first half of the year fell 17
percent and coke production slumped 40 percent year-on-year. The economic downturn in central Europe has battered NWR's
steel customers, although Salamon said there were signs steel
production levels are rising. "Our inventories peaked in April and are coming down since
then. We expect a better second half than the first half," he
said, adding the group may be able to surpass its 10.5 million
tonnes coal production target for 2009, which it had cut in May. The mining group also said it had suspended dividend
payments to keep balance sheet flexibility. It had 392 million
euros in unrestricted cash in the first half.
Source: Reuters
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