UPDATE: Coal & Allied 1st Half Net Profit Up 54%; Almost Triples Dividend
27 Juli 2010 - 9:19AM
Dow Jones News
Coal & Allied Industries Ltd. (CNA.AU) said Tuesday net
profit for the half year ended June 30 rose 54% on year but
excluding one-time divestments it fell 50%.
In an interim report, the company said net profit rose to
A$497.8 million from A$323.6 million but excluding the divestment
of its Maules Creek and Vickery coal projects, the figure fell to
A$161 million, lower than most broker expectations.
The company hiked its interim dividend payout to A$4.50 a share
compared to an interim payout of A$1.60 a share last year and a
full-year total of A$3.50 a share in 2009.
Chris Drew, an analyst at RBC Capital Markets, said that the
dividend was ample compensation for the "slightly weak" profit
figure.
"It probably reflects the cash they'd got in from those sales"
of the Maules Creek and Vickery coal projects, he said.
The dividend was covered just 1.27 times by the company's
earnings per share of 574.9 cents, but Drew said that wasn't a
concern.
Coal & Allied shares, which were in negative territory in
early trading, closed up 12 cents or 0.1% at A$99.60 after the
earnings report. The benchmark S&P/ASX 200 index rose 0.3% to
4497.4 points.
Southern Cross Equities director Charlie Aitken said the
dividend payout was a positive sign for Australia's upcoming
earnings season.
"I think you are going to see capital management surprise all
through the Australian reporting season," he said. "Australian
resources have too much capital. They will either use it or lose
it, by giving some back to shareholders or taking someone
over."
Coal & Allied has three operations in the Hunter Valley
coal-producing region near the New South Wales state port of
Newcastle, and is 76% owned by Rio Tinto Ltd. (RTP).
The company said its equity share of coal production in the six
months to the end of June totalled 8.9 million metric tons, while
its share of shipments was 8.4 million tons.
Revenues for the half year slipped 26% to A$929.1 million from
A$1.25 billion.
Coal & Allied blamed the stronger Australian dollar and a
lower U.S. dollar coal price, as well as an increase in production
costs due to rising strip ratios from lower-quality coal seams, for
the fall-off between revenues and normalised profits.
-By David Fickling, Dow Jones Newswires; +61 2 8272 4689;
david.fickling@dowjones.com
(David Rogers in Sydney contributed to this article)
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