Australia's Macarthur cuts output and profit forecasts
[2008-12-23 17:04:27]
Australian miner Macarthur Coal Ltd., which produces a pulverised coal injection (PCI) product for steel makers in Asia, announced on today that it would curtail its production and cut first-half profit forecasts amid a global slowdown in demand, sending its shares down 20 percent.
The company would make production cuts at its mines in the north-eastern state of Queensland, to ensure stockpiles of coal were manageable.
Macarthur Coal now expected its first-half fiscal 2009 profit to be between A$75-A$125 million ($50-$84 million), down from a previous forecast of A$150-A$160 million that was reaffirmed just last month.
The company also cut its coal sales target, suspended its interim dividend and cut jobs as customers postponed shipments amid falling demand. It now expects to sell about 3.9 million tonnes of coal in the year to June 30, down from an earlier forecast of 5 million tonnes.
"The uncertainty as to when recovery will take place and the increasing pressures on costs generally, are all factors taken into account when making these decisions, said Chairman Keith De Lacy in a statement.
Demand for metallurgical coal, dependent solely on purchases from steel mills, has been particularly hard hit by the global financial crisis as steel makers slash production, reducing the need for raw materials.
China's once-bustling steel mills have cut production by a fifth since the global financial crisis hit it economy a few months ago.
Australia's government cut its forecast for the country's metallurgical coal production in 2008/09 by 5 percent on Monday to 146.6 million tonnes, and said the outlook for steel and steel-making raw materials had deteriorated in the past three months.
