UK Coal, which barely two weeks ago was trumpeting a return to profit in 2011, was down in the dumps on Friday morning after revealing a sharp decline in first quarter production.
Production in the first quarter to the end of March was 1.4m tonnes, down from 2.1m tonnes in the first quarter of 2011, of which 1.0m tonnes was from deep mines (2011: 1.6m tonnes) and 0.4m tonnes was from surface mines (2011: 0.5m tonnes).
As previously reported, production in the period at Daw Mill was poor due to the slow ramp up of the 303s panel, the coal mining firm revealed. "We continue work to progress the safe recovery of 32s, needed to maintain production over the 2012/13 winter. Otherwise, production at the other mines has been broadly in line with expectations," the company said.
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At the end of the first quarter 2012, total net debt, including generator loans/prepayments but excluding restricted cash balances, was £154.1m, of which generator balances were £79.5m. The total net debt compares with £138.8m at December 31st 2011 and is stated after the benefit of £5.6m of receipts in the first quarter of 2012 from property sales.
UK Coal's shares were down 0.75p to 15.5p in the first two hours of trading after the interim management statement, having slumped as low as 14.72p at one point.
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