The plunge into heavy losses followed a pounds 131m write down of RJB's colliery assets to reflect the reduction in size and value of its coal contracts with the electricity generators. At the pre-exceptional level profits for the six months to the end of June fell by 90 per cent from pounds 44m to pounds 4m.
Richard Budge, RJB's chief executive, blamed the sharp fall in profits on lower sales to the three main coal-fired generators at lower prices and cautioned that it would be difficult to pick up additional sales in the second half because international spot prices were at a 15-year low.
On an annualised basis, the reduction in the value of the coal contracts with National Power, PowerGen and Eastern has reduced RJB's profitability by pounds 115m. Mr Budge said that in light of that, it was a creditable performance to have made any profits at all.
He also sounded a note of caution about the prospects for RJB's Stillingfleet colliery at Selby, which employs 600. RJB has already closed down one face because of geological problems and said yesterday that the pit continued to be a "major concern". Asked whether Stillingfleet was vulnerable to closure, Mr Budge said: "We will take out any high-cost colliery as required."
Mr Budge also urged the Government to stand firm over the moratorium on consents for further gas-fired power stations, saying that the decisions to allow the Baglan Bay project in south Wales and a station at Coryton to go ahead had cost RJB one million tonnes of lost sales.
Mr Budge said it would be rash to assume that RJB's industrial relations problems were behind it since "Mr Scargill seems to want to strike on an annualised basis". Total sales for the six months fell from 13.5 million tonnes to 11.4 million tonnes, of which 10 million went to the electricity generators. The dividend was held at 3p.
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