Western Coal Corp. has declared its strategy and delivery plan are on track after second quarter results revealed net income of $40.8 million, up 18-fold from $2.2 million a year earlier. Revenue was $220.4 million, up 105 percent from $107.6 million.
"Our record production in the second quarter demonstrated strong growth and that our strategy and delivery plan is working," said Keith Calder, president and chief executive officer.
"Our objective is to create long term shareholder value by more than tripling production to 10 million tonnes over the next three years through organic growth alone. We remain on track to reach that objective by fiscal 2013."
Coal production in the quarter ended 30 September 2010 was 1.5 million tonnes, up 90 percent from 0.8 million tonnes a year ago.
Western's business is the exploration, development and production of coal, approximately 80 percent of which is metallurgical, supplied to global steelmakers. The remainder is thermal coal, used for electric power generation. “We have a global customer base and supply five of the largest steel mills in the world with our high quality metallurgical coal,” the company said in a statement.
Western has three mines in British Columbia, Canada; four mines in West Virginia, USA, which it acquired in July 2009, and one mine in Wales, UK. The company is also actively engaged in coal exploration and seeks to acquire new coal assets.
Western's three-year organic growth strategy is to increase production by 212 percent to 10 million tonnes for fiscal 2013, largely through an increase in capacity from the deployment of new trucks and shovels and through further productivity improvement initiatives.
The introduction of company-owned larger equipment is part of a strategy of phasing out reliance on contractor fleets and will also contribute to cost savings, the statement said.
The company believes the long term market will show strong demand and a shortage of supply for high quality metallurgical coal, providing a continued opportunity to expand production and supply to increasingly diversified international markets, with China, India and South America driving the increase in demand.
