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CEY - the quiet achiever

  1. From Shaw analyst today
    " Centennial clocks up 300% profit lift, to buy Powercoal
    July 29, 2002
    Centennial Coal surprised even the more bullish analysts this morning, as it delivered a profit of $28.95 million – close to triple its result for last year. The mid-cap thermal and coking coal specialist also unveiled plans to purchase New South state-owned electricity generator Pacific Power for $306 million plus $25 million in stamp duty.

    Revenues for the full year for Centennial lifted 137% to $144.4 million, with an EBITDA of $43.9 million. The group also declared an interim unfranked dividend of 8c, bringing the full year distribution to 16c.

    Centennial attributed the strong result to a 20% lift in the average coal price received, better than forecast US dollar export prices, use of tax losses not previously brought to account, coupled with continuing strong demand, especially in the domestic market.

    In other news, Centennial said it plans to purchase Powercoal for $331 million. This acquisition, according to the company, will see Centennial become the largest independent supplier of coal for power generation in NSW, fuelling approximately 30% of the state's electricity consumption.

    “Almost 80% of Centennial Coal's production will be sold under long-term Australian dollar indexed-priced contracts, with contracted production projected to generate in excess of $5 billion,” the company said in its release to the market.

    The acquisition will be funded through a $100 million capital raising and a debt facility being arranged with a syndicate of banks. The equity raising will consist of an institutional placement and a priority entitlement offer to shareholders. The record date for the entitlement offer is planned to be Thursday 1
    August 2002 and the institutional component finalised through a book-build process, commencing on Tuesday 30 July.

    At 1141 AEST, Centennial shares remained in a trading halt and as such unchanged from Friday’s close of $1.75.







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