Centennial Coal (CEY): Loser

Centennial Coal (CEY) is the Loser of the week (week 46 of 2006) – the worst performing company on the Australian stock market this week. The coal mining company closed the week 29 percent lower after a disappointing strategic review. Centennial Coal reported that full year profit may drop as much as 36 percent because it will write down the value of its Newstan mine. Newstan will complete longwall mining in mid-2008 and then be put on care and maintenance, the company said. Longwall mining, normally underground, is the name given to an extraction practice where companies drill and cut away a long slice of a mine's wall to obtain the ore. "It is no longer economically viable to continue longwall operations in the current area and that Newstan's equipment can be better utilized at other group mines,'' Centennial said. Centennial will accelerate expansion of its Mandalong mine using equipment from Newstan, it said. It will also cease operations at its Awaba and Mannering mines by 2008. "Following the restructure, Centennial will have a substantially refocused business, enabling a greater emphasis on the world-class Anvil Hill open-cut project, developing the full potential of the Tahmoor coking coal mine and enhancing the group's strongly performing western assets," managing director Bob Cameron said. Centennial added that while it expects a significant improvement in profitability at its Tahmoor mine, the improvement is less than it had expected. "This is a direct result of the delayed start-up of the current block, resultant increased costs and some sales slipping into the 2008 financial year," Mr Cameron said.

Centennial Coal Limited is listed on the Australian Stock Exchange (ASX) under stock code . You can view their investor website here. CEY was listed on the ASX on 4 August, 1994. Centennial Coal (CEY) is a coal mining and marketing company supplying thermal and coking coal to the domestic and export markets. The Company is a major fuel supplier to the New South Wales energy industry, fuelling approximately 47% of the State’s coal-fired electricity. Centennial Coal sells approximately a third of its coal into the export market. Coal is exported through ports at Newcastle and Port Kembla in NSW. Customers include power stations and steel mills in Japan, Korea, India, Europe and South America. Browse for Australian stockbroker recommendations. Check your charts and good luck with your share trading!