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Ash4781

Biggest Uk Coalminer To Report Record £82m Loss

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http://www.guardian.co.uk/business/2009/ju...l-record-losses

Britain's biggest coalmining company warned today that it expects to make a record first-half pretax loss of £82m compared with a loss of £9.9m over the same period last year because of higher production costs and a fall in coal prices.

UK Coal expects full-year deep mine production to rise to 6.75m tonnes from 6.2m tonnes a year ago. Total first-half production was flat at 3.7m tonnes, the company said.

It spent £155m on production at its deep mines in the first half of the year, compared with £136.3m last year. It now expects these mines to make a loss of about £35m, compared with a loss of £24.2m a year earlier.

"We have deliberately increased the amount of deep mine development work we undertake alongside coal production," said the Doncaster-based company. "This increases costs in the short term but will enable a smoother flow of future coal production and minimise face gaps, consequentially benefiting future production volumes."

The firm said that net debt at the end of June would total £145m, up from £137.1m at the end of December.

UK Coal, which has a large property portfolio, has also been affected by the downturn in the housing market.

Its wholly owned subsidiary, Harworth Estates, which manages a large portfolio that includes agricultural land originally acquired for its underlying coal reserves and the sites of former mines, has seen its portfolio fall £37m in value.

"Whilst agricultural land prices have continued to improve, the market for redevelopment land has been particularly subdued and, not surprisingly, the valuations of this land have fallen, despite planning progress," said UK Coal.

"Business park valuations have also reduced, reflecting increased yields on shorter term commercial tenancies.

"Overall, we are therefore expecting the valuation on Harworth Estates to have fallen by around 9% in the first half, resulting in a first half non-cash valuation loss in the income statement of some £37m."

Last year, the company reported a loss of £15.6m. Shares in the company closed down 5p or 4.07% at 117.5p

Not looked at their accounts but at guess it's two companies one that digs coal, and one that builds homes

The mines appear loss making ('£35m, compared with a loss of £24.2m a year earlier.') and the landbanks they are holding seem to have been written down in value.

I suppose this is the miracle economy though.

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Their Headquarters is on the outskirts of Harworth in North Notts and they are possibly the last reasonably sized employer there after the massive glass factory closed its doors a couple of years ago. I wonder if there will be redundancies because of the property collapse. I have seen a lot of million-square-feet warehouses springing up in the area of Harworth pit and remaining idle and unrented as there just isn't the business in the area to support such capacity.

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