Proactive Investors - Bens Creek Group PLC (LON:BENB) has reported a doubling of production during the first half of its financial year, ended 30 September 2023, albeit financially the company’s performance was hampered by prevailing economic conditions.
The company produced 204,998 tons of clean metallurgical coal in the half year, up 105% on 2022, with the completion of 18 train shipments, up 125% - included in the shipments was a delivery to Arcelor Mittal, one of the largest steel producers in the world.
At the end of September, the company held some 42,728 tons of coal in inventory.
Post period end, in November, the company announced it had executed an agreement with Avani for the delivery of three trains of coal totalling some 33,000 short tons (due by end of January).
Operationally, the company noted that both its highwall miners were fully active.
The company is now moving towards "full production", chief executive Adam Wilson noted.
Economic conditions have tempered the company’s financial performance, albeit the strong operational performance provided some resilience.
"We have now successfully completed the transition of the business and are moving towards full production,” Wilson said in a statement.
He added: "Sales for the period were ahead of last year, reflecting our improved productivity.
“However, inflationary pressures on costs and a deteriorating price led to an increase in losses when compared to the same period last year.
“Our average sales price in the period being only $118/ton against $166/ton for the comparable period in 2022, a difference of $50/ton which, if we had achieved it in the period upon which we are reporting, would have been expected to result in a small profit for the half.”
Today, Bens Creek reported an earnings (EBITDA) loss of US$6.5 million for the half year, in line with the US$6.4 million loss for the same period a year ago.
Noting the company’s comparative resilience, however, Wilson noted: “We were delighted to enjoy the support of both Avani and JCAM (ACAM) who assisted us by providing debt facilities during difficult months and Integrity with whom we have continued our strong relationship.
“A few of our competitors did not have the same level of support, issuing WARN notices ahead of making substantial redundancies. We are pleased that we were able to avoid taking any such action.”
Looking ahead, Wilson sees some improvement in pricing: “The early part of the 2nd half of our financial year has seen a significant rise in the High Vol B met coal prices, from a low of $191/ton to a current price of $250/ton.
“This will bring our sales prices to levels seen in the comparable period in 2022.
“This has resulted in an improved order book and it has allowed us to commit to sales through to the end of the third quarter which, if trains booked run to schedule, could see the group produce its first monthly profit.
“We are also delighted to announce that a number of those confirmed trains have been negotiated with Avani to be shipped to India. This will help the company enter the Indian market, which is a key target for the future.
"Overall, the outlook has improved for us, and we look forward with growing confidence to the coming months."
He added: “With both Avani and Integrity in place, the company will continue to establish its branded coal in markets worldwide.
“As ever I thank all of our staff for their continued commitment and support to the business and we are hopeful that we will be able soon to deliver positive returns to our shareholders."