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Higher volumes give Anglo Pacific a lift in Q3

Lower coal and vanadium prices weighed on Anglo Pacific’s royalty income levels in the third quarter, but rising volumes boosted the firm’s total portfolio contribution by 7% year on year to £12.9 million.
Higher volumes give Anglo Pacific a lift in Q3 Higher volumes give Anglo Pacific a lift in Q3 Higher volumes give Anglo Pacific a lift in Q3 Higher volumes give Anglo Pacific a lift in Q3 Higher volumes give Anglo Pacific a lift in Q3

The operator of the Kestrel coal mine in Queensland plans to boost output by 40% in 2019

Staff reporter

Royalty income for Q3 was down 7% year on year at £9.5 million, while total royalty related revenue rose by 6% to £12.3 million.

Income from the Kestrel coal mine in Queensland fell by 4% compared with the same period in 2018 to £7.6 million. However, Anglo Pacific said plans by the Kestrel operator (EMR Capital and PT Adaro Energy) to boost volumes by 40% in 2019 were on track.

"With the income we have earned year to date, along with our expectation for strong volumes to come in the fourth quarter, we would expect 2019 to be another record year of revenue for the Group," CEO Julian Treger said.

"With US$75 million of acquisitions year to date, 2019 will be a record year of investment for Anglo Pacific. This is very much in line with our objectives at the beginning of the year to continue and accelerate our level of growth," he said.

Treger noted that weak commodity prices and an uncertain macroeconomic outlook would continue to provide investment opportunities for the company.

Alexander Pearce, an analyst at investment bank BMO, said the company's portfolio income was 13% weaker than expected, but played down the impact on earnings guidance.

"Looking ahead, the miss is likely to have only a modestly negative impact to our full year 2019 earnings estimates (less than 5%), and we continue to expect earnings and dividend growth into 2020," said Pearce.