CALGARY (CP) -- Higher coal prices helped push Fording Canadian Coal Trust's [TSX:FDG.UN; NYSE:FDG] fourth-quarter profits up to C$218 million, more than doubling the C$85 million it earned in the same period in 2004.
Net income for the three months ended Dec. 31, 2005, amounted to C$1.49 per unit, compared to 58 cents last year. Revenue rose to C$540.2 million from C$324.9 million.
For 2005, profits soared to C$834 million from C$150 million in 2004, the Calgary-based trust said late Wednesday. Revenue increased to C$1.87 billion from C$1.18 billion in 2004.
Fording attributed the increase in quarterly profits to historically high coal prices, the reversal of a provision for future income taxes and other gains.
''Higher coal prices allowed us to greatly increase our fourth quarter distribution to unitholders compared with 2004,'' Fording's president Jim Popowich said in a release.
Coal sales volumes decreased 15% during the fourth quarter from 2004 levels due to customer delays of shipments, Fording said, and decreased 5% overall for the year.
The cost of product sold during the quarter rose 7% year-over-year to C$124 million due to higher mining and energy costs, it said. For the year, the cost of product sold was up 9% to C$497 million for 2005 due to a higher costs such as energy, equipment parts and mining supplies.
The cost of product sold at Elk Valley Coal increased 25% year-over-year in the fourth quarter and 16% to C$32.40 per tonne for the year, primarily due to high energy costs and higher mine strip ratios, the trust said.
Fording has a 60% interest in Elk Valley Coal, the world's second-largest supplier of seaborne hard coking coal, through its investment in Fording Limited Partnership. The coal is used primarily for making coke by integrated steel mills.
Elk Valley, whose remaining interest is held by Vancouver-based Teck Cominco [TSX:TEK.SV.B], has an interest in six mining operations in southeast British Columbia and west central Alberta.
Elk Valley owns four operations outright: Fording River, Coal Mountain, Line Creek and Cardinal River. It has an 80% interest in the joint-venture Greenhills operations and a 95% interest in the limited partnership which owns the Elkview operations.
Elk Valley owns other properties, including the coal preparation plant and coal resources at the former Quintette operations and other coal resources in British Columbia as well as a 46% interest in Neptune Bulk Terminals (Canada) Ltd., a Vancouver coal and potash loading facility.
Fording also owns NYCO, which consists of subsidiaries of the trust that operate wollastonite mining operations in New York State and Mexico and a tripoli mining operation in Missouri.
Wollastonite is an industrial mineral that is used in the manufacture of automotive composites, adhesives and sealants, among other products. Tripoli is used primarily in buffing and polishing applications.
Prior to the earnings announcement, Fording units shed 71 cents Wednesday to close at C$45.63 on the Toronto Stock Exchange.
(c) The Canadian Press 2006
