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Shares in Atlantic Coal (LON:ATC) more than doubled on Thursday after revealing what Adam Wilson, the company’s chairman, described as a “remarkable” turnaround.
A cursory look at the AIM quoted coal miners results quickly shows why Wilson didn’t mince words in his commentary.
In the six months to June 30, Atlantic Coal delivered sales of US$10.4mln, up 9.7% on the corresponding period a year ago, and an increase in profit from operations of just over US$4.4mln as last year’s small loss turned into a profit of US$4.24mln.
A dramatic 29.9% cut in costs was surely helpful in delivering those numbers, but the key figure was the increase in total coal sales from 75,761 tons last year to nearly 106,000 tons this time round.
Given that market conditions have been tough and that there was some severe adverse weather at the company’s Stockton mine during the period, Wilson’s enthusiasm for these numbers is understandable.
At heart, the improvement was due, he said, to the company’s decision to modernise Stockton to exploit high value anthracite reserves.
That modernisation included the acquisition of new haul trucks and excavators, and the refurbishment and expansion of the wash plant.
After the end of the period, the company also commissioned a new rail loading facility.
All of which bodes well for Atlantic's future ambitions.
“We have long stated that our ambition is to grow both our reserve base of anthracite and our production capacity and have been actively looking for further high quality and economically viable anthracite coal properties,” said Wilson.
On AIM, Atlantic Coal shares gained 0.11p or 143% to trade at 0.19p. At this price the company is valued in the market at around £9mln.