MC Mining hit by soaring costs in first half

MC Mining, which is currently subject to bidding war between Vulcan Resources and a consortium of investors looking to take over the company, said group revenues were up 80% year-on-year at $25.2m in the six months to 31 December despite a 58% plunge in the average coal price to $112 per tonne, from $265 per tonne in the first half of the previous year.

Higher volumes sold and the recommencement of operations at its Vele Colliery meant that the cost of sales jumped to $24.1m from $10.1m a year earlier.

Gross profit totalled $1.1m, down from $3.9m previously, while the reported pre-tax loss widened to $5.8m from $1.3m. In addition to lower prices, the bottom line was impacted by a $1.9m increase in employee costs, primarily attributable to one-off employee benefits payments during the period.

Godfrey Gomwe, managing director and chief executive, said: "The strong revenue growth through the period was very pleasing given the challenging coal market conditions. Our ability to continue to move product is important and we are seeing some signs of increased demand from thermal coal buyers."

The stock was down 2% at 7.11p by 1055 GMT.