LONDON (Alliance News) - Atlantic Coal PLC shares fell on Monday after it said its pretax loss widened in 2014 as revenue fell and its margin was squeezed, adding it was disappointed not to make a profit after it reached record levels of production at higher coal prices.
Atlantic Coal shares were fell 20% to 0.12 pence per share on Monday morning.
The US-focused coal miner reported a USD3.5 million pretax loss in 2014, widening from the USD1.5 million loss in 2013. Revenue for the year totalled USD18.4 million with a cost of sales of USD18.0 million compared to revenue of USD19.7 million with costs of USD16.0 million in 2013. It said gross margin narrowed to 2.23% in 2014 from 18.40% in 2013.
Atlantic Coal booked a USD398,212 gain on particular items, compared to a USD421,960 loss a year earlier and other income increased to USD205,673 from USD12,114. Exceptional expenses fell to USD359,088 from USD497,623, and administrative expenses dropped to USD3.4 million from USD3.6 million.
At the end of 2014, Atlantic Coal had a cash balance of USD725,517, slightly down from the USD877,003 at the end of 2013.
In 2014, Atlantic produced a "record" 165,046 tonnes of coal, with average sale prices for anthracite coal rising to USD120.79 per tonne from USD117.89 per tonne. However, sales in 2014 fell 8% year-on-year to 153,698 tonnes from 166,780 tonnes.
"The directors believe anthracite is the most versatile and high quality metallurgical coal," said Atlantic. "Only 1% of the world's coal reserves is made up of anthracite, and even then few of the reserves are of as high a quality as the North East Pennsylvania coalfield, or benefit from the same level political stability, established infrastructure and an industry-friendly jurisdiction."
The company said the home and industrial heating market remains a large part of its sales, contributing around 47% of total sales so far in 2015, and said the market "remains stable" as many homes throughout North East US are still unconnected to the mains gas supply, and this is expected to continue throughout 2015 and beyond.
Atlantic said it continues to look for other anthracite coal mines in Pennsylvania to add to its existing Stockton mine to increase production to supply the US markets and export opportunities. However, the company said export contracts are currently looking for between 40,000 to 50,000 tonne shipments, which would be over a quarter of current production making it "challenging" to provide such a quantity, which is why further coal properties are needed.
"2014 has seen a lot of exciting and positive developments at Stockton mine which are feeding through into our performance for 2015 and provide us with a sound basis for optimism going forward. That said, despite record production it was disappointing not to make a profit which was primarily caused by lower sales volumes and low prices towards the end of the year," said Chairman Adam Wilson.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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