JOHANNESBURG (miningweekly.com) – Coal explorer Continental Coal on Thursday reported a 35% drop in revenue to A$29.7-million for the six months ended December, 2012, from A$45.4-million in the comparative half of the previous year.

This was on the back of a lower received coal price as well as reduced export thermal sales.

The coal explorer also reported a net loss after tax of A$7.3-million in the six-month period under review, from A$7-million in the comparative period in 2011, with a significant portion of noncash costs and increased finance costs contributing to the loss.

Gross profit decreased from A$7.6-million in the 2011 interim period to A$2.7-million in the six months to December 2012.

Earnings over the period were adversely affected by a 27% decline in dollar terms in the benchmark coal price for export thermal coal from Richards Bay and by delays in the group receiving the necessary approvals to develop its Ferreira coal mine into the adjacent and adjoining prospecting rights.

However, Continental Coal’s Vlakvarkfontein coal mine and the Ferreira coal mine continued to generate positive cash flow over the period under review, and the Penumbra coal mine commissioned successfully.

The company closed the year with reduced cash of A$1.2-million, following the group's funding of the Penumbra coal mine development.

Penumbra was the group’s third thermal coal mine to be commissioned and completed first exports to the Asian market during the year.

PRODUCTION
The group reported that total coal sales for the first half of the year fell 15% to 857 409 t.

Continental Coal also noted a 32% reduction in export thermal coal sales, reaching 209 750 t, while sales to parastatal Eskom increased by 5% to a record 540 328 t on the comparative 2011 period.

Thermal coal sales in the second half of the year were forecast to increase by 17% to about one-million tons, attributable to increased export coal sales from both the Penumbra and Ferreira coal mines.

Meanwhile, the company said in a statement that negotiations with India-based coal and power utility companies and global commodity trading groups on acquisitions and strategic joint venture around development projects were ongoing.