Hargreaves confident on meeting targets
MINING group Hargreaves Services said today it believes the group is well placed going into the second half of the year and is optimistic of achieving its targets for the full year.
In a trading update ahead of the announcement of its results for the six months ended November 30 2013, the group said it continues to make good progress in its surface mining activities with Tower continuing to produce in line with management expectations.
Hargreaves said that whilst there have been delays re-starting a number of its newly acquired Scottish sites, six sites are now operating with the prospect of starting on two further sites in the next few weeks, which will bring activities in line with plan.
Monckton continues to be exposed to the current volatility in the steel sector and discussions with our customers over contracts for 2014 are on-going, the company said, with some customers seeking to minimise levels of off-take and commitment through quarterly contracts.
The business and assets of Hatfield Colliery in Doncaster were sold to Hatfield Colliery Partnership.
Hargreaves assisted in the restructure by entering into a new off-take contract, on substantially the same terms as the previous contract, running into the second half of 2015.
The closure programme at Maltby is progressing in line with plan, said Hargreaves, with the mine shafts expected to have been filled and capped by the end of the financial year as part of Maltby’s overall restoration programme.
UK Bulk Coal operations continue to perform ahead of management expectations, benefiting from strong demand from power stations. Volumes are further underpinned by sales of coking coal and PCI coal into the steel sector.
Hargreaves said it expects these trends to continue and contribute to a strong second half.
It said the UK Speciality Coal operations were also performing well and continue to successfully mitigate the loss of supplies as a result of the administration of UK Coal.
“In Germany, challenging steel markets have depressed coke volumes and margins in the first half of the year. Whilst the outlook for coke demand and coke prices remains uncertain, existing contract positions and potential contract awards provide us with some confidence that the German operation will enjoy a strong second half,” said Hargreaves.
Net debt at November 30 2013 was £95.6m, in line with management expectations, and taking account of cash flows associated with the SRG acquisition, working capital fluctuations and the deconsolidation of the European debt of £10m.
Hargreaves said: “Although risks continue around coke markets, particularly for Monckton, the group is pleased with the strong performance in coal trading and the progress in its surface mining operations.”
The group expects to announce its interim results on February 11.
