Reuters reported that miner New World Resources raised its 2012 coal production target to meet full order books, after posting estimate beating second quarter results.
The owner of the largest Czech hard coal mines said it expected to produce 11.0 to 11.1 million tonnes of coal in 2012, a touch up from a previous range of 10.8 to 11.0 million.
Mr Mike Salamon chairman of NWR that it was seeing some bright spots in central Europe, where the coal market has been struggling with falling prices and weaker demand in the last year as the Czech economy sits in recession and other economies slow sharply.
He added that "If you look at automobile manufacturers, our customers' customers, then they are doing reasonably well in terms of Europe. I wouldn't say it is fantastic, but it is not complete doom and gloom. There's a great deal of uncertainty."
The company tightened its sales target to 10.3 to 10.4 million tonnes, with the split of higher margin coking coal unchanged in the mix at 48 percent. Coking coal made up 55% of first half sales due to seasonal effects.
Mr Marek Jelinek CFO of New World Resources said that "We assume these volumes we will sell out. We don't feel the need to limit production despite what is going on in the central European and global economies."
The company had kept its outlook unchanged a month ago when it announced the average agreed price for third quarter coking coal deliveries was up 2% from the second quarter.
Mr Jelinek said there was a higher risk that prices would fall in the fourth quarter rather than rise, although the company has yet to start negotiations.
NWR's attributable net profit fell 66% YoY to EUR 28.3 million in the second quarter, beating the average estimate of EUR 18.3 million in a Reuters' poll as the company kept costs in check. Revenue fell less than expected to EUR 347.5 million from EUR 455.2 million the year before, one of its best quarters on record.
Mr Ceska Sporitelna said that "As the inventory effect was not as strong as expected, it seems that NWR had slightly better cost control than we expected and markedly better than what consensus expected. The lower costs and lifted production guidance are slightly positive."
The company said it would pay an interim divided of EUR 0.06 per share, beating some analysts' expectations and a touch down from EUR 0.07 in the second half last year.
Source - Reuters
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