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“The next few months will be difficult for the company as lower coal prices and the strong Australian dollar affect the business,” Yancoal ceo Murray Bailey said.
“Yancoal does not see any signs of improvement in coal markets in the next few months. While there have been modest cutbacks in production in some countries, more will be required in the coming months to balance the market,” the half-year report says.
“Yancoal expects metallurgical coal prices to remain weak and volatile in the second half.”
The coal miner reported a net profit of $415.7 million in the six months to June 30, up 65.7% from $250.8 million recorded in the first half of 2011.
Yancoal produced 4.21 million tonnes of saleable coal from four projects including Ashton, Austar, Moolarben and Yarrabee, during the first half of the year, among which metallurgical coal output was mainly from its Ashton and Yarrabee projects with a total output of 1.17 million tonnes.
The output from Gloucester mines has not been included in the half-year report, as the merger of the two miners only became effective on June 27 with the merger implementation date being July 6, Yancoal said.
After the merger with Gloucester Coal, Yancoal became the biggest publicly-listed coal miner on the Australian Stock Exchange.