Hand-to-Mouth Existence for Macarthur Coal

Macarthur Coal (ASX:MCC) continues to struggle with pulling up production due to rains despite posting a net profit of $142.4 million for the year ended June 30. The results are a marginal improvement from last year's $139.1 million.

Although robust coal prices helped Macarthur to bounce back from the effects of extreme weather, output will continue to be strained next year because many of the company's mine pits are still flooded.

''We are hampered by our inability to reduce water'' in our mines, said chief executive Nicole Hollows. ''We are effectively living hand to mouth, unable to rebuild stockpiles.'' She also said the company's coal prices had remained strong despite coming off their highs.

The takeover target's bottom line rose to $241.4 million—almost twice the 125.1 million earned last year—due to profit from equity sales in some coalmines. Earnings per share jumped to 82.8 cents from 49.3 cents while sales revenue rose to $687.3 million from $670.50 million the previous year.

Coal output dropped to 3.85 million tonnes for the year ended June 30, down by 1.32 million tonnes. Output forecast for this year is 5 to 5.3 million tonnes, taking into account a 50 percent rise in rainy days over normal conditions.

Peabody Energy and ArcelorMittal plans to offer a joint $15.50 takeover for the company, but Macarthur is seeking a higher bid. Peabody and Arcelor say Macarthur shareholders can retain dividends of up to 16 cents if their offer is accepted.

The company declared a final dividend of 16 cents per share, down from 17 cents the previous period.

Macarthur shares rose 12 cents to $15.74 by early afternoon compared to the slightly lower benchmark S&P/ASX 200 index.