LONDON (Alliance News) - Atlantic Coal PLC shares rose on Thursday after it swung to a pretax profit in the first half of 2015 after revenue rose due to higher sales and production alongside an improved margin.
Atlantic Coal shares were up 94% to 0.155 pence per share on Thursday morning.
However, the miner warned that the coal market remains difficult and that this will stretch into the second half but said it has restructured its cost base to deal with the downturn in the market.
The coal miner swung to a USD3.7 million pretax profit in the six months ended June 30, from a USD271,921 loss a year earlier as revenue experienced a modest lift to USD10.4 million from USD9.5 million.
"I am pleased to report an excellent performance in the first half in what have been challenging global market conditions. Set against this background the company has performed extremely well, moving into a meaningful profit after a small loss in the comparable period last year and the overall loss for 2014," said Managing Director Steve Best.
The rise in revenue was also complimented by a substantial fall in its cost of sales to USD5.3 million, leading to a gross profit of USD5.1 million, from a cost of sales of USD7.5 million and a gross profit of only USD2.0 million a year earlier.
Slightly offsetting that was administrative costs, which doubled to USD3.2 million from USD1.6 million.
The rise in revenue was attributable to a 40% rise in sales, which totalled 105,971 tonnes of coal compared to 75,761 tonnes a year earlier whilst production increased to 91,877 tonnes of coal, up 8.6% from 84,567 tonnes a year earlier.
"We have not only reduced our operating costs and increased our production capability with new haul trucks and excavators, a refurbished and increased capacity wash plant and the advance of our mining operations into the near solid Mammoth seam, but we have also developed sales of Run of Mine coal to other anthracite processors thereby increasing both sales volumes and revenue," said Best.
At the end of the half, Atlantic Coal reported a stronger cash balance of USD571,393 than the USD295,787 held at the end of June 2014.
"As we proceed through second half of 2015, while we still anticipate challenging market conditions, we have substantially reduced our cost base and with the support of our operational team, we believe that the company is well positioned to exploit exciting and expanding new customer channels," said Best.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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