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UK Coal in hole as output dives
17 Oct 2008UK Coal was in a hole today after a shock profit warning saw its already crashing shares come off a further 30%.
The rump of the old sprawling state-owned British Coal, which has been reinventing itself as a property play, admitted today problems down t'pit could mean its profits are 40% lower than the hoped-for £70 million.
Blaming the wet summer and the fact its miners are attempting to extract the last difficult vestiges of currently mined seams, UK Coal said volumes this year will be 10% lower. On top of that the international price of coal in recent weeks has slumped by around a third.
UK Coal has much of its production forward sold at historically low prices to the big Midlands power stations owned by E.On and EDF. If output falls as it has, it cannot make huge gains from selling the rest of its production at the inflated international price.
The shares fell 61p to 139¼p.
