The third quarter profits of West Perth-based Straits Resources Ltd subsidiary Straits Asia Resources Ltd have fallen to a third of 2006 levels after a force majeure and abnormal rainfall, the company has announced.
Straits Asia's thid quarter profits were at $3.5 million in 2007, down from $9.5 million in the same quarter the previous year.
The full text of a company announcement is pasted below
As previously announced to the market, Straits Asia Resources Limited (Straits Asia, SGX: SAR) declared force majeure in July 2007 in respect of coal deliveries from Sebuku mine and that event, coupled with the abnormal rainfall up to August adversely affected Straits Asia's Q3 profits, which were announced today.
Despite the weather problems, Sebuku mine still achieved 718 thousand tonnes of production, up from 623 thousand tonnes in Q2 mainly due to favourable conditions in September. The product coal and sales from Sebuku and the Straits Asia's Group's after tax profit for Q3 were:
| Sebuku Coal Operation | Q3 2007 | Q3 2006 | YTD 2007 | YTD 2006 |
| Product coal t'000 | 718 | 859 | 2,175 | 2,500 |
| Coal Sales t'000 | 538 | 733 | 2,041 | 2,485 |
| Profit after tax (Straits Asia) US$'000 | 3,514 | 9,483 | 19,040 | 35,961 |
Straits Asia also ceased marketing copper for its parent company during the quarter, which was one of the main causes for a drop in turnover from US$ 69.1 million to US$ 50.9 million.
Commenting on the results, Richard Ong CEO of Straits Asia said, "Obviously we were unhappy that we had force majeure for the first time in our history. As regards future bad weather conditions, we have invested significantly in additional pumping equipment, engaged water flow experts and taken over the pit de-watering from our contractor. We have put the events of July and August behind us quickly and I am pleased to say that production was back to normal levels during September. October was also a good month for production."
Mr Ong added, "We are now beginning to lock in 2008 prices at record levels, which gives me tremendous confidence for our future particularly with our recent announcements concerning the acquisition of Jembayan mine and leases on the Northern part of Sebuku."
