1st Aug 2007 07:02
Rio Tinto PLC01 August 2007 Rio Tinto's 75.7 per cent owned subsidiary, Coal & Allied Industries Limited,issued the following news release in Australia yesterday. All dollars areAustralian currency. Coal chain constraints and flooding impact Coal & Allied profits - 2007 halfyear results SUMMARY • Revenue was $656.8 million compared with $732.6 million for the same period last year. • Net profit after tax was $70.0 million compared with $148.6 million for the same period last year. This net profit benefited from a one-off income tax adjustment of $46.1 million. • Coal & Allied's share of production was down 21.8 per cent to 8.6 million tonnes (from 11.0 million tonnes in 2006). • No dividend will be paid on ordinary shares. Commenting on the company's performance, Coal & Allied's Managing Director, MrDoug Ritchie said, "Coal & Allied's net profit after tax of $70 million washelped by a one-off income tax adjustment of $46 million. The underlying resultof $24 million reflects the difficulties arising from the poor performance ofthe Hunter Valley coal chain and the impact of floods on our operations in June." "Coal & Allied's share of production in the first half of 2007 was down nearly22 per cent compared with 2006, despite record prices for thermal coal. Sharpincreases in demurrage costs resulting from the ship queues off Newcastle andthe strengthening of the Australian dollar also adversely impacted the company'sresult. "Infrastructure issues continued to impact Coal & Allied's financial performanceand until a satisfactory long term commercial framework is put in place there isunlikely to be any significant improvement in this performance. "Coal & Allied supports Port Waratah Coal Services (PWCS) new proposal toimplement a long-term commercial framework that will provide greater certaintyfor PWCS and its long term customers. "We also encourage the efforts of PWCS to have the existing 'common user' leaseprovisions removed. It is critical that PWCS achieves these recently announcedinitiatives to bring long-term benefits to all producers," Mr Ritchie said. Infrastructure PWCS is seeking confirmation from the NSW Government that it will agree to theremoval of the 'common user' lease provisions at the PWCS Kooragang Islandfacility in the event the Newcastle Coal Infrastructure Group (NCIG) facility isdeveloped. In addition, PWCS is planning to expand its operations further and increaseexports from 102 million tonnes per annum to 113 million tonnes per annum. Thiswill provide long-term customers with additional port capacity for growth. Theadditional expansion includes improvements to two receival and three stackingstreams, installation of a new reclaimer and stacker, integrity work and thereplacement of two of the original terminal reclaimers. Summary of financial performance Coal & Allied's results for the first half of 2007 compared with the same periodof 2006: Half-year ended 30 June 2007 2006Revenue ($ millions) 656.8 732.6Net profit after tax ($ millions) 70.0 148.6Operating cash flow ($ millions) 1.7 88.3Dividends (cents per share) - 110Coal & Allied equity share of coal production (million tonnes) 8.6 11.0Coal & Allied equity share of coal shipments (million tonnes)1 9.3 10.6 1 Shipments exclude purchased coal. Sales revenue Sales revenue of $656.8 million was 10 per cent lower than for the comparativeperiod of 2006, due to a reduction in the allocated port capacity and severeweather in the Hunter Valley in June which disrupted port, rail and miningoperations. Net profit after tax Coal & Allied's net profit after tax reflects lower sales volumes. Higher coalprices were offset by a stronger performance by the Australian dollar relativeto the US dollar and higher demurrage costs. Cash flow Net operating cash flow of $1.7 million was attributable to lower operatingprofits and higher finance charges from increased debt levels. Dividends No dividends will be paid on ordinary shares after taking into account the cashflow for the half year and the current gearing level. Debt Gearing (net debt to net debt + equity) was 28.8 per cent at 30 June 2007,compared with 25.7 per cent at 31 December 2006. Capital expenditure Capital expenditure for the half year was $59.4 million compared with $40.4million for the same period last year. The main expenditure for the first halfof 2007 was for replacement of heavy mobile equipment. Force majeure The severe weather conditions affecting the Hunter Valley and the Port ofNewcastle in June resulted in the company declaring force majeure under itssales contracts. On 27 July 2007 the company advised its customers it was nolonger affected by this force majeure event. All financial information contained in this release has been prepared on thebasis of the Australian Equivalents to International Financial ReportingStandards and Interpretations. For further information, please contact: LONDON AUSTRALIA Media Relations Media RelationsChristina Mills Ian HeadOffice: +44 (0) 20 8080 1306 Office: +61 (0) 3 9283 3620Mobile: +44 (0) 7825 275 605 Mobile: +61 (0) 408 360 101 Nick Cobban Amanda BuckleyOffice: +44 (0) 20 8080 1305 Office: +61 (0) 3 9283 3627Mobile: +44 (0) 7920 041 003 Mobile: +61 (0) 419 801 349Investor Relations Investor Relations Nigel Jones Dave SkinnerOffice: +44 (0) 20 7753 2401 Office: +61 (0) 3 9283 3628Mobile: +44 (0) 7917 227 365 Mobile: +61 (0) 408 335 309 David Ovington Susie CreswellOffice: +44 (0) 20 7753 2326 Office: +61 (0) 3 9283 3639Mobile: +44 (0) 7920 010 978 Mobile: +61 (0) 418 933 792 Website: www.riotinto.comHigh resolution photographs available at: www.newscast.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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