On December 16, Australia-based Macarthur Coal Limited, the world's largest producer of seaborne low volatile pulverized injection coal used for steelmaking, has decreased its profit guidance for the first half (ending December 31) of the financial year 2010-11, due to unseasonal wet weather, lower volume of low volatile pulverized coal injection (LV PCI) sales, the stronger Australian dollar than previously forecast and higher fixed operating cost than expected.
The company said that the lower volume of LV PCI sales was partially offset by higher volumes of thermal sales while fixed operating costs were not offset by saleable production towards the end of the quarter.
Based on current forecasts, profit for the six months to December 31, 2010 is likely to be in the range of $97 million to $102 million. This is lower than the $115-125 million guidance provided on October 27, 2010, but remains higher than the $39.6 million reported in the corresponding half of the previous year.
Saleable production is likely to be in the range of 2.4-2.5 million mt rather than the range of 2.5-2.7 million mt provided in previous guidance as a result of the unusual weather conditions.
Macarthur reminded that the unseasonal wet weather that impacted production necessitated the declaration of force majeure on December 3, 2010.