UPDATE: Macarthur Coal Boosts Fiscal Year Profit Guidance To A$115 Million-A$125 Million
July 05 2010 - 11:16PM
Dow Jones News
Macarthur Coal Ltd. (MCC.AU) said Tuesday it has upgraded its
profit guidance for the fiscal year ended June 30 after
better-than-forecast coal sales.
The Brisbane-based miner said it expects net profit of A$115
million-A$125 million, prior to any non-cash adjustments, up from
previous guidance of A$103 million-A$113 million. The upgrade was
driven by coal sales of 5.26 million metric tons, above guidance of
4.8 million-5 million tons.
"Our operations have remained focused on coal delivery and, with
the Dalrymple Bay Coal Terminal achieving record throughput in
June, we were able to load some shipments sooner than expected,"
Chief Executive Nicole Hollows said in a statement.
"Given additional sales in this financial year we have started
the 2011 financial year with lower available coal stocks, however
both of our mines are performing well and we are focused on
continuing to perform well in 2011."
At 0235 GMT, Macarthur shares were up 2% at A$13.00, but the
gains may be as much to do with renewed dealmaking in the coal
sector as the profit upgrade.
With the Australian government last week abandoning its planned
Resource Super Profits Tax and replacing it with the watered down
Minerals Resource Rent Tax, some market watchers are tipping an
increase in merger and acquisition activity as the uncertainty over
the original tax proposal is removed.
This view was reinforced Monday when Thailand's Banpu PCL
(BANPU.TH) launched a bid valuing Centennial Coal Ltd. (CEY.AU) at
A$2.5 billion on the first working day after the MRRT was
announced.
With expectations of further dealmaking in the coal sector
running hot, IG Markets strategist Ben Potter said the market would
now be watching closely to see if Peabody Energy Corp. (BTU) would
rework its failed bid for Macarthur.
"The big question will be whether or not this upgrade and
yesterday's M&A news reignites interest from potential suitors,
in particular Peabody," he said in a client note.
"If Peabody thought Macarthur was worth A$15 per share under the
now defunct RSPT, one would think it offers more value under the
new MRRT."
Macarthur Coal rejected Peabody's A$3.8 billion offer in May
after the U.S. group trimmed its offer to A$15 a share from A$16
after due diligence and factoring in the potential impact of the
RSPT.
The profit upgrade came as analysts toured Macarthur's
Queensland mine sites and received an update on the Middlemount
growth project, a joint venture with Noble Group Ltd. (N21.SG).
-By Alex Wilson, Dow Jones Newswires: 613-9292-2094;
alex.wilson@dowjones.com
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