New World reinstates dividend

Finance

Publishing Date: 26 Aug 2010 2:41pm GMT
Author: Mining Journal

New World Resources NV (NWR), the Czech coal and coke producer, has reinstated its dividend. Despite a '50% of earnings' dividend policy, the company paid out less than half in 2008 and nothing last year, blaming "market conditions".

Executive chairman Mike Salamon told Mining Journal: “In 2008 we saw 2009 coming and so we did not pay out at 50%, but we have had a strong half year, we have a robust balance sheet, we entered Q3 with good margins, so if one has a dividend policy you have to apply it under those circumstances.”

At its Debiensko project in Poland, the company has initiated a one-year detailed execution schedule, costing €25 million. “Essentially when you do a major capital project there is a process of doing designing, a feasibility study and execution plan, which is underpinned by a certain amount of engineering. Because NWR last built a mine over 20 years ago, the company does not have a lot of experience doing this,” said Mr Salamon, adding: “Prudence tells one that you do a very, very detailed plan ahead of starting the physical execution. You’d have to do that plan anyway but we are now doing the bulk ahead of it ahead of it so when we start the physical execution there is very little room for error.”