TIDMWTN TIDMCBM
RNS Number : 5524U
Western Canadian Coal Corp
26 June 2009
Western Canadian Coal Reports Fiscal Fourth Quarter and
Fiscal 2009 Operating and Financial Results
Vancouver, B.C., June 26, 2009 - Western Canadian Coal Corp. (TSX: WTN, WTN.DB &
WTN.WT and AIM: WTN) (the "Company") announces its operating results for the
three and twelve month period ended March 31, 2009. During this period, the
Company's financial position continued to strengthen as a result of strong cash
flow from operations. Net income for the fourth quarter of fiscal 2009 was $47.6
million or earnings per share of $0.23, on a basic and diluted basis. For the
year ended March 31, 2009, the Company earned net income of $214.5 million or
earnings per share of $1.17 and $1.14 on basic and diluted basis, respectively.
Income from mining operations increased to $58.8 million in the fourth quarter
of 2009. This compares to the loss from mining operations of $15.2 million in
the similar period of the previous year. The increase over the fourth quarter
2008 was achieved primarily as a result of higher coal prices realized from the
current coal year contracts and favourable foreign exchange rates, which led to
coal sales of $111.7 million. These sales were 48% higher than in the same
quarter a year ago.
Coal shipments for the fourth quarter 2009 were 346,000 tonnes or 60% lower than
the same quarter of 2008. The average realized price of $316 per tonne in the
current quarter was 263% higher than the same quarter of 2008. Favourable
exchange rates also aided to the improved prices realized from the sale of the
Company's coal in this quarter over previous quarters. The lower shipment levels
were the result of lower production levels and customer orders being deferred
into subsequent quarters.
Coal production for the fourth quarter 2009 was 501,000 tonnes or 28% lower than
the same quarter of 2008. Cash costs in the fourth quarter 2009 were $136 per
tonne as compared to $95 per tonne in the fourth quarter 2008. The increase in
the fourth quarter 2009 over the same period a year ago was primarily due to
higher stripping ratios.
The balance sheet of the company continues to strengthen. When comparing the
March 31, 2009 financial position to the March 31, 2008 position, the Company's
working capital position improved by $218.0 million to a positive working
capital position of $145.6 million, including approximately $75 million of cash
in the bank. The Company's debt to shareholders' equity ratio improved to 0.42
from 2.81 over the same period a year ago.
On June 24, 2009, the Company's shareholders approved the acquisition of
Cambrian Mining Plc (see May 20, 2009 and June 24, 2009 press release). The
acquisition is expected to close on July 13, 2009. Upon closing, Western will
issue approximately 89 million shares to Cambrian shareholders, 72.1 million
shares of Western owned by Cambrian will be cancelled, $29 million of Western's
convertible debentures owned by Cambrian will be cancelled, Western's loan to
Cambrian of $40.6 million plus interest will be forgiven, and five days after
closing, Western will redeem US$ 27 million of Cambrian's notes.
The acquisition adds immediate value through the creation of a larger, stronger,
and more diversified coal mining company. The new Western will have globally
diversified operations in three key coal producing regions, product
diversification with the inclusion of thermal coal, a more globally balanced
sales program, an expansion of coal reserves and resources by 39% and 50%, 100%
increase to current year coal production, significant cost savings, and will
simplify the Company's corporate structure.
John Hogg, President & CEO stated, "The fortunes of the Company have greatly
improved with the record coal prices in fiscal 2009. The Company took advantage
of these record prices to strengthen its financial position, and catch up on
waste removal, which resulted in higher stripping ratios and corresponding
higher cash costs during fiscal 2009. The investment in waste removal has paid
off as it has allowed the Company to remain competitive in these difficult
market conditions. As an example, Wolverine's strip ratio since year-end has
rapidly fallen towards the expected strip ratio of 12:1 for fiscal 2010. As
such, all of the Company's operations are currently cash positive. The Company
is in a position to react quickly to increased demand levels which we have
already started to experience. We now expect to sell approximately 2.2 million
tonnes of metallurgical coal, which is up from our previous guidance of 2.0
million tonnes for fiscal 2010. Our stronger balance sheet has also allowed us
to grow the Company with the recent acquisition of our largest shareholder,
Cambrian Mining Plc. The acquisition allows us to grow, strengthen and diversify
our business to be even better positioned when market conditions improve."
News Release
This news release is prepared as at June 25, 2009 and should be read in
conjunction with the Company's audited financial statements for the year ended
March 31, 2009 and notes contained therein, and Management's Discussion and
Analysis (MD&A) for the same period. This news release does not constitute MD&A
as contemplated by relevant securities rules. Western Canadian Coal Corp.'s
audited financial statements and MD&A and the interim financial statements and
MD&As for the periods referred to above are available on SEDAR at www.sedar.com
under the Company's profile.
Financial Summary:
+----------------------------------------+--------------------+--------------------+
| (In thousands of Canadian dollars, | | |
| except tonnes | | |
| and per share data) | | |
+ +--------------------+--------------------+
| | March 31, 2009 | March |
| | | 31, 2008 |
+----------------------------------------+----------------------------------------+--------------------+
| Cash & cash equivalents | $ 74,853 | $ 14,137 |
+----------------------------------------+--------------------+--------------------+
| Accounts receivable | 39,270 | 11,418 |
+----------------------------------------+--------------------+--------------------+
| Inventory | 62,376 | 24,173 |
+----------------------------------------+--------------------+--------------------+
| Total current assets | 217,943 | 54,552 |
+----------------------------------------+--------------------+--------------------+
| Total assets | 662,337 | 453,324 |
+----------------------------------------+--------------------+--------------------+
| | | |
+----------------------------------------+--------------------+--------------------+
| Current liabilities | $ 72,304 | $ 126,891 |
+----------------------------------------+--------------------+--------------------+
| Convertible debentures | 61,729 | 140,411 |
+----------------------------------------+--------------------+--------------------+
| Other long-term liabilities | 62,896 | 67,032 |
+----------------------------------------+--------------------+--------------------+
| Shareholders' equity | 465,944 | 118,990 |
+----------------------------------------+--------------------+--------------------+
| Total liabilities and shareholders' | 662,337 | 453,324 |
| equity | | |
+----------------------------------------+--------------------+--------------------+
| | | |
+----------------------------------------+--------------------+--------------------+
| Current ratio (current assets/current | 3.01 | 0.43 |
| liabilities) | | |
+----------------------------------------+--------------------+--------------------+
| Debt to equity ratio (total | 0.42 | 2.81 |
| debt/shareholders' equity) | | |
+----------------------------------------+--------------------+--------------------+
+----------------------------------+-----------+-----------+-----------+--------------+
| | Three months ending | Twelve months ending |
+----------------------------------+-----------------------+--------------------------+
| | March 31, | March 31, |
+----------------------------------+-----------------------+--------------------------+
| | 2009 | 2008 | 2009 | 2008 |
+----------------------------------+-----------+-----------+-----------+--------------+
| Tonnes sold | 346,000 | 865,000 | 2,042,000 | 3,043,000 |
+----------------------------------+-----------+-----------+-----------+--------------+
| | | | | |
+----------------------------------+-----------+-----------+-----------+--------------+
| Revenue | $ 111,684 | $ 75,291 | $ | $ 252,489 |
| | | | 586,093 | |
+----------------------------------+-----------+-----------+-----------+--------------+
| Cost of goods sold | 52,838 | 90,495 | 298,211 | 293,128 |
+----------------------------------+-----------+-----------+-----------+--------------+
| Income (loss) from mining | 58,846 | (15,203) | 287,882 | (40,639) |
| operations | | | | |
+----------------------------------+-----------+-----------+-----------+--------------+
| Other expenses | 4,504 | 22,597 | 37,692 | 51,968 |
+----------------------------------+-----------+-----------+-----------+--------------+
| Income tax expense | 6,740 | - | 35,658 | 13,380 |
+----------------------------------+-----------+-----------+-----------+--------------+
| Net income (loss) | $ | $ | $ | $ (105,987) |
| | 47,602 | (37,801) | 214,532 | |
+----------------------------------+-----------+-----------+-----------+--------------+
| | | | | |
+----------------------------------+-----------+-----------+-----------+--------------+
| Earnings (loss) per share, basic | $ 0.23 | $ (0.33) | $ 1.17 | $ (0.95) |
| | | | | |
+----------------------------------+-----------+-----------+-----------+--------------+
| Earnings (loss) per share, | $ 0.23 | $ (0.33) | $ 1.14 | $ (0.95) |
| diluted | | | | |
+----------------------------------+-----------+-----------+-----------+--------------+
| | | | | |
+----------------------------------+-----------+-----------+-----------+--------------+
Included in the above balances and results are the Company's proportionate share
of its interest in the results from the Belcourt Saxon joint venture.
Revenues
For the three month period ended March 31, 2009, total revenues were
$111,684,000 from the sale of 346,000 tonnes of coal. The average price per
tonne realized during the period was $323 or US$256.
For the three month period ended March 31, 2008, total revenues were $75,291,000
from the sale of 865,000 tonnes of coal. The average price per tonne realized
during the period was $87 or US$87.
The primary reason for the 48% increase in the Company's total revenues over the
comparable period in the prior year is the increase in sales price realized and
the strengthening of the US dollar offset by a lower sales volume. The increase
in sales price was a result of higher coal contract prices. The average exchange
rate of the US dollar in relation to the Canadian dollar in the three month
period ended March 31, 2008 was $1.26 compared to $1.00 in the comparable period
in the prior year.
Cost of goods sold
Cost of goods sold for the three months ended March 31, 2009, including costs of
product, transportation, and depletion, amortization and accretion charges
totaled $52,838,000 or approximately $153 per tonne compared to $90,495,000 or
approximately $105 per tonne in the fourth quarter of fiscal 2008. The higher
costs in 2009, which are higher than levels currently being mined in fiscal
2010, was due to the higher stripping ratios incurred to remove the waste rock
required for the Wolverine mine to get back to the life-of-mine plan. Cost of
goods sold includes cost of production, transportation, and depletion,
amortization and accretion charges as presented in the table below:
+-------------------------+--------------+--------------+----------------+-----------+
| (In thousands of Canadian dollars) | | Three month ended March |
| | | 31, |
+----------------------------------------+--------------+----------------------------+
| | 2009 | $/tonne | 2008 | $/tonne |
+-------------------------+--------------+--------------+----------------+-----------+
| | | | | |
+-------------------------+--------------+--------------+----------------+-----------+
| Cost of product sold | $ 38,722 | $ 112 | $ 59,236 | $ 69 |
+-------------------------+--------------+--------------+----------------+-----------+
| Transportation and | 8,207 | 24 | 22,503 | 26 |
| other | | | | |
+-------------------------+--------------+--------------+----------------+-----------+
| Depletion, amortization | 5,909 | 17 | 8,756 | 10 |
| and accretion | | | | |
+-------------------------+--------------+--------------+----------------+-----------+
| | | | | |
+-------------------------+--------------+--------------+----------------+-----------+
| Total cost of goods | $ 52,838 | $ 153 | $ 90,495 | $ 105 |
| sold | | | | |
+-------------------------+--------------+--------------+----------------+-----------+
Cost of product sold increased 62% in the current period's per unit cost of
product sold over the comparable prior period was due to lower coal production
volumes from the Company's Perry Creek Mine caused by higher stripping ratios
and a lower coal yield experienced as a result of the areas being mined.
Transportation and other costs have decreased due to the change in the volumes
of coal sold from the Perry Creek and Brule mines between the three month ended
March 31, 2009 and 2008.
Depletion, amortization and accretion charges increased due to the additional
depletion, amortization and accretion charges related to the Perry Creek mine
assets that were acquired or brought into production or commissioned during
fiscal 2008.
For the fourth quarter 2009, cash costs, which consist of cost of product and
transportation costs, which is considered a key performance indicator for the
industry, were $136 per tonne compared to $95 per tonne for the quarter ended
March 31, 2008.
Income from mining operations
Income from mining operations for the three months ended March 31, 2009 was
$58,846,000 or 53% of sales. This compares favourably to the $15,204,000 loss
from mining operations in the three months ending March 31, 2008.
Other expenses
Other expenses, for the quarter ending March 31, 2009, were $868,000 and include
the following:
+-------------------------------------+------------------------+------------------+
| | Three months ending March 31, |
+-------------------------------------+-------------------------------------------+
| (In thousands of Canadian dollars) | 2009 | 2008 |
+-------------------------------------+------------------------+------------------+
| | | |
+-------------------------------------+------------------------+------------------+
| General, administration and selling | $9,566 | $ 9,804 |
+-------------------------------------+------------------------+------------------+
| Coal exploration and other mine | 1,208 | 1,197 |
| costs | | |
+-------------------------------------+------------------------+------------------+
| Interest and financing fees on | 3,114 | 9,893 |
| long-term debt | | |
+-------------------------------------+------------------------+------------------+
| Investment impairment | - | 1,819 |
+-------------------------------------+------------------------+------------------+
| Unrealized loss on forward exchange | 1,501 | - |
| contracts | | |
+-------------------------------------+------------------------+------------------+
| Other (income) expense | (10,885) | (116) |
+-------------------------------------+------------------------+------------------+
| | | |
+-------------------------------------+------------------------+------------------+
| Total other expenses | $4,504 | $ 22,597 |
+-------------------------------------+------------------------+------------------+
General, administration and selling costs decreased by $238,000, or 2%, to
$9,566,000 for the quarter ended March 31, 2009 as compared to $9,804,000 for
the quarter ended March 31, 2008. The decrease is primarily related to the
decrease in the stock based compensation expense. Stock based compensation
expense decreased as a result of fewer stock options being issued in the fourth
quarter of the current fiscal year compared to the comparable period in the
prior fiscal year. This was offset by an increase in sales and marketing costs
due to an accrual for the Wolverine Royalty Sharing agreement which is to allow
for the potential liability in the event the Company's position is incorrect.
Coal exploration and other mine costs for the three months ended March 31, 2008
of $1,208,000 were consistent with costs in fiscal 2008 totaling $1,197,000.
Exploration costs are charged to earnings in the period in which they are
incurred, except where these costs relate to specific properties for which
economically recoverable reserves have been established, in which case they are
capitalized. Care and maintenance costs relate to the carrying costs of the
Willow Creek mine.
Interest, accretion and deferred financing fees on long-term debt increased to
$3,114,000 compared to $9,893,000 in 2008. In the fourth quarter of fiscal 2008
penalty fees were incurred by the Company and an adjustment of the accretion of
the long-term debt was made a result of the change in its estimated life.
Similar charges were not incurred in fiscal 2009. This balance has also
decreased due to the conversions of convertible debentures throughout fiscal
2009 as well as the repayment of other liabilities during the year.
For the quarter ended March 31, 2009, the Company recorded $1,501,000 of
unrealized losses relating to its outstanding forward currency contracts. At
March 31, 2008, the company did not have any forward currency contracts
outstanding.
Other income amounted to $10,885,000 for the three-month period ended March 31,
2009, an increase of $10,769,000 over the year ended March 31, 2008 of $116,000.
The increase mainly relates to the royalty revaluation gain of $7,981,000 and
the gain on fair value adjustment of the investment of $1,393,000 recorded
during the quarter ended March 31, 2009. In the fourth quarter of fiscal 2008,
the Company recorded an investment impairment of $1,819,000 relating to its
ABCP.
Net Income
Net income for the three month period ended March 31, 2009 was $47,602,000
compared to a net loss of $37,801,000 for the same period in the prior fiscal
year. The net income reflects the previously discussed changes to Income from
mining operations and Other expenses and an income tax expense of $6,740,000
reflecting a current income tax expense of $3,784,000 and a future income tax
expense of $3,956,000.
Market Outlook
All of the Company's current fiscal 2010 coal production is under contract for
sale to international steel producers. Coal prices for fiscal 2010 are
approximately US$126 per tonne for hard coking coal and US$90 per tonne for its
ULV-PCI coal. Since coal deliveries during fiscal 2010 will include certain
quantities of fiscal 2009 carryover tonnages, the average selling prices for
coal to be delivered in fiscal 2010 are expected to be in the range US$120 to
US$125 per tonne, which reflects pricing for both hard coking coal and ULV-PCI
coal and carryover tonnages at fiscal 2009 prices.
The current economic downturn has resulted in significant cutbacks in steel
production on the part of the Company's customers, in some cases as much as 50%
below 2008 levels. This has affected the short term demand for metallurgical
coal, leading to production cutbacks at the Company's operations. Despite the
significant curtailments by the Company's customers, the Company has achieved
coal sale prices that are the second highest on record, which speaks well to the
quality of the Company's coal and the service provided to customers. The Company
further expects that the economic stimulus packages introduced by governments
including the US, Japan and China will lead to increased steel production and
therefore increase the demand for metallurgical coal. Already in China, there is
higher construction activity in the first quarter of 2009, together with
increased consumer spending in steel-based goods such as appliances and autos.
In the longer term, the market fundamentals for metallurgical coal should
continue to improve which will provide continued opportunity for the Company to
increase market diversity and market share. The Company's Wolverine hard coking
coal forms a key blend component with many of the world's leading steel mills,
while the Brule mine ULV-PCI coal is consistently ranked among the top PCI coals
worldwide. These high quality and high demand coals, in conjunction with the
region's highly efficient rail and port infrastructure with excess capacity,
continue to provide the Company a competitive advantage to continue to grow and
diversify.
Guidance
The Company now expects to produce approximately 1,800,000 tonnes of
metallurgical coal from its two operating mines:
* Wolverine operations producing approximately 1,200,000 tonnes of hard coking
coal
* Brule mine producing approximately 600,000 tonnes of ULV-PCI coal.
The increase in production levels is a result of increased demand from our
customers. As a result, the Company now expects to ship approximately 2,200,000
tonnes of metallurgical coal which will consist of approximately 1,300,000
tonnes of hard coking coal and 900,000 tonnes of ULV-PCI. The Company has the
flexibility to rapidly adjust production to respond to changes in demand for its
coal.
The Company's Wolverine hard coking coal and Brule mine ULV-PCI coals have been
sold to major steel mills throughout Asia and Europe, with long term supply
agreements in place for the next three years.
The Company has hedged approximately 75% (or US$195 million) of expected fiscal
2010 revenues with foreign exchange forward contracts at an average rate of
C$1.187 per US$ 1.00. These contracts mature monthly from now to April 2010.
With the stripping ratios in fiscal 2010 expected to be lower than in fiscal
2009, cash costs are expected to be approximately C$110 to C$115 per tonne.
Liquidity and Capital Resources
The Company's aggregate operating, investing and financing activities during the
year ended March 31, 2009 resulted in a net increase to cash of $60,716,000. As
at March 31, 2009, the Company's cash balance stood at $74,853,000 and working
capital was $145,639,000. Working capital levels have increased over the prior
year as a result of an increase in the coal prices for fiscal 2009 as well as
higher inventory levels.
For the year ended March 31, 2009, the Company had positive cash flow of
$315,876,000 on coal sales from its Perry Creek and Brule mines of $582,457,000
before depletion, amortization and accretion and working capital changes, while
for the year ended March 31, 2008, a cash flow deficit of $9,516,000 on coal
sales of $252,489,000 was recorded.
As at March 31, 2009, the Company had not drawn into its short-term credit.
In light of the current economic situation, the Company has significantly
reduced its planned capital expenditures for fiscal 2010 to approximately
$3,000,000 to $4,000,000. Cash flow from operations is expected to fund the
fiscal 2010 capital expenditures program. The Company is closely monitoring the
current economic situation and will continue to review its capital programs in
light of the volatility.
Conference Call - REVISED
The Company will be hosting a conference call to discuss the fourth quarter 2009
operating results at 7:00am (Pacific) on June 26, 2009. To participate on the
call, dial either 1-800-731-5319 or 416-644-3426. The call will also be webcast
live on the Company's website at www.westerncanadiacoal.com. For replay access
please dial either 416-640-1917 or 1-877-289-8525
About Western Canadian Coal
Western Canadian Coal Corp. produces high quality metallurgical coal from mines
located in the northeast of British Columbia. The coal is sold to many of the
top steelmakers in the world. The Company also has interests in various coal
properties in northern and southern British Columbia and a 50% interest to
explore and develop the Belcourt and Saxon group of properties in northern BC.
Currently, these properties provide the company with an estimated 15 years of
coal reserves at current production levels. For more information, please visit
www.westerncanadiancoal.com
Forward-Looking Information
This news release contains "forward-looking information" within the meaning of
applicable securities laws. Generally, forward-looking information can be
identified by the use of forward-looking terminology such as "plans", "expects",
or "does not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", or "does not anticipate", or "believes"
or variations of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might", or "will be taken", "occur",
or "be achieved". Forward-looking information is based on the opinions and
estimates of management at the date the information is made, and is based on a
number of assumptions and subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ materially
from those projected in the forward-looking information. Many of these
assumptions are based on factors and events that are not within the control of
Western and there is no assurance they will prove to be correct. Factors that
could cause actual results to vary materially from results anticipated by such
forward-looking information include changes in market conditions, variations in
coal recovery rates, risks relating to operations, fluctuating coal prices and
currency exchange rates, changes in project parameters, the possibility of
unanticipated costs and expenses, labour disputes and other risks of the mining
industry, failure of plant, equipment or processes to operate as anticipated,
the business of the companies not being integrated successfully or such
integration proving more difficult, time consuming or costly than expected as
well as those risk factors discussed in the Annual Information Form for the year
ended March 31, 2008 for Western available on www.sedar.com. Although Western
has attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in forward-looking
information, there may be other factors that cause actions, events or results
not to be anticipated, estimated or intended. There can be no assurance that
forward-looking information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
information. Western undertakes no obligation to update forward-looking
information if circumstances or management's estimates or opinions should change
except as required by applicable securities laws. The reader is cautioned not to
place undue reliance on forward-looking information.
WESTERN CANADIAN COAL CORP.
"John Hogg"
President and Chief Executive Officer
For further information:
David Jan
Director, Investor Relations
Phone: 604-608-2692
Email: djan@westerncoal.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEFEFISUSEDM
Grafico Azioni Cleantech (LSE:CBM)
Storico
Da Mag 2024 a Mag 2024
Grafico Azioni Cleantech (LSE:CBM)
Storico
Da Mag 2023 a Mag 2024
