Yancoal said the continuing low cost of coal has led the company to post a full year loss of $353.5 million.
Chief executive Reinhold Schmidt said the 2014 loss was better than the $832 million deficit Yancoal posted in 2013, pointing to the company’s “robust business strategy to improve our asset portfolio and strengthen our capital structure”.
“Under challenging global market conditions, we have significantly reduced operating costs, maximised operational efficiencies and established new blending opportunities across New South Wales to create greater value for our existing assets and pipeline of future projects,” Schmidt said.
Revenue for 2014 fell to $1.43 billion from $1.53bn, while operating EBIT came in at a loss of $278.3m compared to a $227.1m loss from the previous calendar year.
Yancoal said losses were attributable to the impacts of the continued oversupply of the global thermal and metallurgical markets, minimal positive coal price improvements during the period, the sustained strength of the Australian dollar and existing take or pay arrangements.
It also said it was experiencing difficult geological conditions at the Ashton and Abel operations, while the Austar mine has not reopened since a double fatality in April 2014.
The company achieved saleable coal production of 16.73 million tonnes (equity basis) for the full year, down one per cent on the same period in 2013.
Looking ahead, Yancoal said market oversupply it set to continue, making a coal price improvement unlikely.
It said cost reduction would remain a key priority for the company while it also looked to maximise new market opportunities via the blending of New South Wales product and delivery into key Asian markets.
2015 will also see Yancoal commence the development of the Moolarben expansion which will include two underground mines, a third open cut mine, an extension to current open pit mines as well as supporting infrastructure.
This will allow Moolarben to produce 17 million tonnes per annum ROM until 2037 and create 120 new full-time jobs.
Yancoal’s production outlook is 15 million tonnes – 15.5 million tonnes (equity share) saleable production for 2015.