China’s Western Australia-based Premier Coal has announced record loses of $4.92 million in their latest accounts released recently.
The news will damage its parent company, Yancoal, which itself reported a $227 million loss in the past twelve months.
The result has seen a dramatic turnaround in profitability as they had reported a profit of $8 million just over a year ago.
The company has already put a focus on reducing costs at their mines, and reduced the workforce in the Collie operation from 450 to about 420. This is on top of the decision by Yancoal itself to cut the workforce at its New South Wales mines.
The result would have been worse but for a $3.4 million tax handout from the Government, with the pre-tax result slumping from a $12.7 million profit to an $8.3 million loss as revenue shed nearly 10 per cent to $219.8 million. Operating cashflow halved to $22.9 million.
Its position will cause concern as Yancoal attempts to raise $2 billion in financing for a controversial acquisition of Coal & Allied despite significant debts held by itself and Premier Coal.
In past, Yancoal’s parent company has absorbed some debt in an attempt to benefit its balance sheet – it is unclear whether Yancoal will do the same for Premier Coal.