Anglo American met coal profits drop 89% in 2013 on lower prices

Anglo American reported an 89% year-on-year fall in profits from its metallurgical coal business, despite record output.

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Underlying operating profit in the coking coal business fell to $46 million in 2013, Anglo American said in its preliminary results on Friday February 14.

The underlying earnings before interest, taxes, depreciation and amortisation [Ebitda] for the same business segment fell to $612 million, from $877 million in 2012.

“This was attributable to a 24% decrease in the average quarterly HCC benchmark coal price,” it said.

Anglo American achieved a weighted average sales price of $140 per tonne fob Australia for its metallurgical coal in 2013, down from $178 per tonne fob in 2012.

Cost-cutting measures, increased sales volumes and a weaker Australian dollar partially offset any further fall in its financial results.
The miner shipped 19 million tonnes of coking coal in 2013, up 9% year-on-year, and reported a record output of 18.7 million tonnes, up 6% year-on-year. 
Anglo American expects coking coal prices to remain subdued in 2014 on oversupply in the market, despite higher demand for seaborne coking coal.