profit forecast up to 160m from 13.5m

very good entry price to mcc at today's prices in light of the large 6 month profit profit increase...

The AustralianNovember 13, 2008 05:44am AEDT
THE AUSTRALIAN
Business

Increased coal prices to drive up profit: Macarthur October 16, 2008
Article from: Australian Associated Press
MACARTHUR Coal has forecast a profit of up to $160 million in the half year to the end of December 2008.

The coal miner said profit for the first half of fiscal 2009 is likely to be in the range of $150 million to $160 million, underpinned by higher coal prices and increased sales.

Macarthur reported net profit of $13.5 million in the previous corresponding half.

“The company’s premium low volatile PCI product remains in strong demand from global steel mills as its use reduces the cost of steel production,” Macarthur chief executive Nicole Hollows said in a statement.

The company’s pulverised coal is used in the production of steel.

Macarthur shares had dropped 77c, or 11.26 per cent, to $6.07 in afternoon trading.

Macarthur, which operates the Coppabella and Moorvale mines in Queensland's Bowen Basin, said the half year profit forecast was due primarily to significantly increased coal prices.

The company said the forecast was dependent on achieving its budgeted shipping schedule and no change in the valuation of financial derivatives from June 30, 2008.

“We are forecasting a greater than ten-fold increase in first half profit, year on year,” Ms Hollows said.

Macarthur, the supplier of more than a third of the world’s pulverised coal, has a full year export target of four million tonnes of PCI and one million tonnes of thermal coal, which is used to fuel power stations.

The coal miner said sales volumes were progressively improving as the Coppabella mine recovered to full operating capacity after flooding in the Bowen Basin earlier this year.

“Importantly, given the current situation in financial markets, Macarthur Coal is in a strong financial position in relation to the funding for future growth,” Ms Hollows said.

AAP