PERTH (miningweekly.com) – Declining coal prices have seen South Africa-focused coal miner Universal Coal report a 76% decline in operating profits for the half-year ended December, while net profits after tax fell by 95% compared with the previous corresponding period.

Universal on Friday reported a 34% increase in run-of-mine (RoM) coal for the period, with the inclusion of the North Block Complex (NBC) during the period under review. RoM production for the interim period was reported at 5.4-million tonnes.

A total of 3.57-million tonnes of coal was sold during the six months under review, up 21% compared with the previous corresponding period, contributing to an 8% increase in revenue from ordinary activities, which was reported at A$217.4-million.

However, a 16% reduction in export pricing during the half-year, at an average sales price of A$96/t, resulted in a 10% reduction in the total revenue per tonne sold for the period.

Universal reported that operating profit for the interim period reached A$9.7-million, a 76% decrease from the previous corresponding period. The miner said that the decrease was owing to greater exposure to the lower margin domestic market and the decline in export coal pricing, particularly in the first quarter of the reporting period.

Operating profit was also affected by a 19% increase in mining costs for the period, owing to a changeover of mining contractors at the New Clydesdale Colliery, and the delay in receiving the Section 11 approval for the Paardeplaats project, which is part of the NBC.

The delay resulted in coal extraction continuing from the remaining opencut areas within the Glisa operation at a higher unit stripping cost, over a resource producing lower product yields.

Net profits after tax for the interim period declined by 9%, to A$2.7-million, with the net present value in the previous corresponding period impacted by the A$20.7-million bargain purchase of NBC. Excluding this bargain purchase would have resulted in a normalized net profit after tax of A$38.9-million for the previous corresponding period.