Profits: MCC, HWI, SRA
Brisbane-based Macarthur Coal posted a sharp drop in first half net profit yesterday but says the full year is still on track.
The company has already signalled that earnings in 2007 would be lower because of various reasons but especially lower export prices as well as problems at the export and rail facilities and changes in mining policy.
Macarthur said that first half profit fell almost 50 per cent to $42.4 million, from $82.1 million in the first six months of 2006 financial year.
“Macarthur Coal’s profits were primarily affected by the 30 per cent reduction in the US dollar coal price in April 2006 from the record previous price,” the miner said.
But analysts said the result was better than the the market had been expecting and the coal miner has reaffirmed its guidance for a net profit of $63 million to $73 million which was given at the 2006 AGM.
Sales fell 22 per cent to $216.2 million from $277.6 million.
“Rain has impacted coal mining in the March 2007 quarter and port congestion has increased,” Macarthur said.
“Coal inventories are also low, leaving the company without stocks to cover unplanned production stoppages.
“Despite the weather-related delays in shipping, the company confirmed that it expects to meet its 4.5 million tonne annual shipping target subject to no further interruptions caused by rain or port congestion.”
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 48 per cent to $64.5 million and the company sliced its interim dividend by half to 11 cents a share from 23 cents a share last year. Earnings per share naturally fell from 47.1c to 22.6c in the latest period.
The shares eased 6c in the sell off yesterday to $4.87.
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Takeover target Housewares International has posted a $29 million loss first half and omitted dividend thanks to its underperforming Australian homewares business.
The $29.1 million net loss for the six months to December 31 compares with a net profit of $11.67 million in the first half of 2006.
The overall result was dragged down by $37.2 million in significant items, primarily a write-down of the assets of the Australian homewares business.
Housewares, which sources products offshore and on-sells to its Australian customers such as department stores, said its Australian homewares division suffered a $6.1 million loss for the six months to December 31.
This compared with a $900,000 loss in the previous corresponding half (and the reason why it has been looking to unload the business, without success).
Housewares said that the continuing losses primarily result from fierce market competitiveness, in particular significant direct import by major customers and associated discounting.
The company has been warning of this for at least 18 months as big retailers, such as Myer and Target, Kmart and Big W move to directly source homewares products from manufacturers in China.
