The first six months of the year proved tough for Hillsborough Resources (HLB-T) in light of poor Asian economies, increased costs and lower coal prices.
The company, which owns 63% of the Quinsam coal mine in British Columbia, incurred a loss of $3.9 million on revenue of $17.1 million (or 22 cents per share) during the period, compared with net earnings of $1.1 million on revenue of $23 million (7 cents per share) in the first half of 1997.
From January to June of this year, the company suffered an operating loss of $1.2 million, down from operating earnings of $4.3 million a year ago.
For the quarter ended June 30, 1998, the company reported a loss of $3.1 million on revenue of $9.1 million (17 cents per share), together with an operating loss of $700,000. By comparison, the second quarter of 1997 saw the company earn $500,000 on revenue of $12.2 million (3 cents per share) and generate a surplus of $2.8 million.
The company’s woes are partly a reflection of the price of coal, which has fallen as a result of lower demand from economically beleaguered Asian countries. Between the second quarters of 1997 and 1998, the company’s price per tonne dropped from $43.27 to $42.06.
In response, Hillsborough says it will re-evaluate proven and probable reserves at Quinsam based on lower world prices.
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