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LONDON (Alliance News) - Bisichi Mining PLC Wednesday said its pretax profit fell in 2013 as lower revenues and higher operating costs hit the company following production issues during the period.
The coal miner said its pretax profit fell to GBP102,000 from GBP2.2 million the previous year as revenues fell 2.4% to GBP35.1 million from GBP36.0 million.
The company warned in November that short-term production issues caused by a blockage at one of its South African coal mining subsidiary's main production pits would affect 2013 earnings.
On Wednesday, Bisichi Mining said its total production at the Black Wattle site fell 5.4% to 1.77 million metric tonnes from 1.87 million metric tonnes and noted that the mine continued to source coal from various opencast pits ensuring a steady state of production throughout the year.
Bisichi Mining said its operating costs increased 3.0% to GBP31.3 million from GBP30.4 million due to the production issues, and the price it received for coal fell during the period.
However, the company recommended to maintain its final dividend payment of 3 pence per share, making its final dividend the same as for 2012 at 4 pence per share.
The company reiterated that production issues in 2013 should not have any impact on its production and profitability in 2014.
"We expect Black Wattle to return to acceptable levels of profitability once we return to full production from our lower cost pits in the second half of 2014 and, although we expect depressed coal prices to continue for the whole of the year, we view the outturn for the year with cautious optimism," Chairman Michael Heller said in a statement.
Bisichi also said that its Black Wattle subsidiary has entered an agreement with Blue Nightingale Trading 817 Ltd for Black Wattle to purchase Run of Mine coal from an opencast reserve owned by Blue Nightingale adjacent to Black Wattle's existing mine in South Africa.
The company said it is the second reserves offtake arrangement it has made with Blue Nightingale, and the new reserve consists of roughly 2.3 million tonnes of high quality coal with very low stripping ratios.
Bisichi Mining shares were untraded at 108.25 pence Wednesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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