Fife coal miner Hargreaves Services yesterday said January and February’s “extremely wet” weather had hampered efforts to make up for production delays.
In an end-of-year trading update, the County Durham-based group said its operations which include St Ninian’s, near Kelty, and Muir Dean, by Crossgates were performing well following the rain and set-up delays.
Hargreaves, which took on the assets from both Scottish Coal and ATH Resources after they slumped into administration early last year, said the problems would contribute to a fall in production profits of up to £5 million.
However, the company’s statement did highlight a stronger run rate during March, April and May.
“Whilst our surface mining operations have performed well since the end of February and current production run rates are encouraging, the delays in the first half of the year in commencing operations and the extremely wet weather in January and February have meant that it has not been possible to recover all of the shortfall in production in the current period,” Hargreaves said.
“The combined effect of these factors is anticipated to reduce the contribution from the production division in the financial year by between £3m and £5m.”
In December Hargreaves hailed the impact of its move to take on Scottish opencast sites, saying the acquisitions had allowed it to “make good progress” in the troubled industry.
Restoration works at St Ninian’s are to funded by the proceeds from the extraction of the site’s remaining coal, with Hargreaves committed to helping deliver “as much as possible” of the large-scale land art project designed by Charles Jencks.
Operations have also recommenced at Muir Dean, where a 27-month project to restore and make the site safe will also be part-funded by the mining of the remaining coal resource.
Overall, Hargreaves said profits in its energy and commodities, transport and industrial services markets had “remained resilient”, with full-year performance in line with management expectations. It remains in discussions with the UK Government over opportunities created by the closure of UK Coal.
Coke markets continued to prove “challenging” for the company’s production site at Monckton, near Barnsley.
The firm had already warned about the likely impact of volatility in domestic steel markets, but yesterday revealed pricing pressure on contract renewals had further hammered the division.
Hargreaves plans to announce preliminary results for the year to the end of May in September.
Earnings for the previous year fell 4.2% to £43.1m, despite overall revenues jumping more than a third to £843.3m.
But interim results published in February showed the company’s first half was well ahead, with total sales up 28% to £460.5m and profits climbing 41% to £29.7m.
Shares in the firm closed the day down 50.50p or 6% at 778.50.