12 October 2011 – trading update

Coal producer ATH has updated on trading this morning revealing that costs have increased significantly during the year to 2 October.  Although sales volumes were significantly higher in the second half of the year and average selling prices also increased, profits are likely to be lower than previously expected.  Although net debt has fallen slightly, and the group has renegotiated its borrowing facilities, no dividend will be paid for the year.  Regular readers will know that the company has suffered from three legacy contracts which are not favourable to ATH and the first of these is almost complete.  This should allow the grouo to return to profit and the end og the second legacy contract in March 2013 will boost profits further.  Short-term prospects are unexciting though and the shares are no more than a HOLD.