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Chairman Keith De Lacy gave shareholders an insight into the year in review at Macarthur Coal’s 2007 Annual General Meeting.
“You can see that we ended up the 2006-7 financial year with an NPAT of $66.5 million,” Mr De Lacy said.
“That’s a good result but of course it doesn’t look so good when it’s compared with the prior year when it was almost $150 million. The obvious reason for the reduced profit was the reduced selling price for our coal, for this financial year compared to the financial year preceding. That, and of course our production was down a little as well due to infrastructure constraints.
“However, we were still able to pay a dividend of 18 cents for the year. Again down on the year before but still a creditable result.”
Mr De Lacy highlighted the fact Macarthur Coal makes an economic and social contribution to the Queensland economy worth $136 million. The company also committed to a new range of environmental initiatives.
“Coal sometimes gets bad press but I can assure you, no coal company, and certainly not Macarthur Coal, is not acutely aware of our responsibilities,” Mr De Lacy said.
“We have appointed our own internal carbon committee to help develop a strategy to minimise our own carbon footprint. Macarthur Coal, together with the coal industry, does contribute a large amount of money to research into the development of clean coal and that - Coal 21 - is an initiative of the Australian Coal Association, aimed at reducing emissions from coal-fuelled power stations and the industry has committed approximately $1 billion over the next 10 years.”
The federal and state governments have also contributed $800 million to the program.
The 2007 financial year saw changes at board level, with former managing director Ken Talbot moving to non-executive director, and Nicole Hollows moving from chief financial officer to CEO, then managing director. CITIC Australia managing director Chen Zeng also joined the board.
“Chen’s ability and knowledge of Asian markets and involvement in Macarthur Coal is, in my view, a great addition to the board,” Mr De Lacy said.
The chairman also touched on Macarthur’s approach to safety, highlighting admirable safety records at both Coppabella and Moorvale mines.
“Safety is a culture at Macarthur Coal. It is not something that we just tick the box. We take it very seriously.
“All site personnel have completed legislative training. We’ve got a state of the art training simulator at the Coppabella mine which allows new and existing employees to be tested in emergency situations in the operation of haul trucks, loaders and dozers and that’s a very interesting thing in itself.
“Everybody’s very proud of our contractor Sedgman, which runs the Coppabella wash plant, has now had 2393 days lost time injury free. That means that they haven’t had a lost time injury for six and a half years, and Leighton Contractors, who operate our Moorvale mine this year reached the milestone of 1000 days lost time injury free, and now are up to 1164, which is more than three years.”
Of primary concern to shareholders in the audience were the on-going infrastructure issues which served to constrain Macarthur’s revenue figures in 2006-07.
“The 2008 financial year will be the third successive year that there will be a reduction of exports through the DBCT, that’s the Dalrymple Bay Coal Terminal chain, which is really not good enough in this day and age in the middle of a resources boom when the world is crying out for our resources. The estimated lost earnings for users of DBCT in 2007 was greater than a $1 billion.”
Mr De Lacy said the response from the Queensland government through Queensland Rail to commit $654 million to new rolling stock, and the approval of the northern link to Abbott Bay Coal Terminal were steps in the right direction. The Dalrymple Bay Coal Terminal expansion program, to increase capacity from 50 up to 85 million tpa by 2010 is also underway. However he stressed the need for a new model for the provision of infrastructure in Australia.
“There is no allowance for spare or surge capacity,” Mr De Lacy said. “Infrastructure provisions should lead, not lag, growth. Industry will pay, we’re not asking for handouts, but the government must co-ordinate, and if we build and the investment comes, everybody wins.
“We have a lot of stakeholders. We have close relationships with our customers, with our joint venture partners and I’ve just made an appeal to government to, perhaps to a certain extent be more involved, in a sense of providing leadership.
“We’ve got all of our infrastructure providers and the communities in which we operate. 2007 has been a year of challenge and changes and they’ll continue.
“Macarthur Coal is focused on meeting these challenges head-on, developing and implementing our company strategy, by growing production and working through the infrastructure challenge, maintaining a strong cost focus, continuing to make a smooth transition to owner operator, reinforcing and developing our commitment to safety and culture across the whole of our staff and moving towards taking full responsibility for our impact on the environment and the community.”
“You can see that we ended up the 2006-7 financial year with an NPAT of $66.5 million,” Mr De Lacy said.
“That’s a good result but of course it doesn’t look so good when it’s compared with the prior year when it was almost $150 million. The obvious reason for the reduced profit was the reduced selling price for our coal, for this financial year compared to the financial year preceding. That, and of course our production was down a little as well due to infrastructure constraints.
“However, we were still able to pay a dividend of 18 cents for the year. Again down on the year before but still a creditable result.”
Mr De Lacy highlighted the fact Macarthur Coal makes an economic and social contribution to the Queensland economy worth $136 million. The company also committed to a new range of environmental initiatives.
“Coal sometimes gets bad press but I can assure you, no coal company, and certainly not Macarthur Coal, is not acutely aware of our responsibilities,” Mr De Lacy said.
“We have appointed our own internal carbon committee to help develop a strategy to minimise our own carbon footprint. Macarthur Coal, together with the coal industry, does contribute a large amount of money to research into the development of clean coal and that - Coal 21 - is an initiative of the Australian Coal Association, aimed at reducing emissions from coal-fuelled power stations and the industry has committed approximately $1 billion over the next 10 years.”
The federal and state governments have also contributed $800 million to the program.
The 2007 financial year saw changes at board level, with former managing director Ken Talbot moving to non-executive director, and Nicole Hollows moving from chief financial officer to CEO, then managing director. CITIC Australia managing director Chen Zeng also joined the board.
“Chen’s ability and knowledge of Asian markets and involvement in Macarthur Coal is, in my view, a great addition to the board,” Mr De Lacy said.
The chairman also touched on Macarthur’s approach to safety, highlighting admirable safety records at both Coppabella and Moorvale mines.
“Safety is a culture at Macarthur Coal. It is not something that we just tick the box. We take it very seriously.
“All site personnel have completed legislative training. We’ve got a state of the art training simulator at the Coppabella mine which allows new and existing employees to be tested in emergency situations in the operation of haul trucks, loaders and dozers and that’s a very interesting thing in itself.
“Everybody’s very proud of our contractor Sedgman, which runs the Coppabella wash plant, has now had 2393 days lost time injury free. That means that they haven’t had a lost time injury for six and a half years, and Leighton Contractors, who operate our Moorvale mine this year reached the milestone of 1000 days lost time injury free, and now are up to 1164, which is more than three years.”
Of primary concern to shareholders in the audience were the on-going infrastructure issues which served to constrain Macarthur’s revenue figures in 2006-07.
“The 2008 financial year will be the third successive year that there will be a reduction of exports through the DBCT, that’s the Dalrymple Bay Coal Terminal chain, which is really not good enough in this day and age in the middle of a resources boom when the world is crying out for our resources. The estimated lost earnings for users of DBCT in 2007 was greater than a $1 billion.”
Mr De Lacy said the response from the Queensland government through Queensland Rail to commit $654 million to new rolling stock, and the approval of the northern link to Abbott Bay Coal Terminal were steps in the right direction. The Dalrymple Bay Coal Terminal expansion program, to increase capacity from 50 up to 85 million tpa by 2010 is also underway. However he stressed the need for a new model for the provision of infrastructure in Australia.
“There is no allowance for spare or surge capacity,” Mr De Lacy said. “Infrastructure provisions should lead, not lag, growth. Industry will pay, we’re not asking for handouts, but the government must co-ordinate, and if we build and the investment comes, everybody wins.
“We have a lot of stakeholders. We have close relationships with our customers, with our joint venture partners and I’ve just made an appeal to government to, perhaps to a certain extent be more involved, in a sense of providing leadership.
“We’ve got all of our infrastructure providers and the communities in which we operate. 2007 has been a year of challenge and changes and they’ll continue.
“Macarthur Coal is focused on meeting these challenges head-on, developing and implementing our company strategy, by growing production and working through the infrastructure challenge, maintaining a strong cost focus, continuing to make a smooth transition to owner operator, reinforcing and developing our commitment to safety and culture across the whole of our staff and moving towards taking full responsibility for our impact on the environment and the community.”
