November 10, 2009 / 1:55 PM / 9 years ago

UPDATE 1-Grande Cache Q2 profit drops 80 pct on weak coal prices

* Q2 EPS C$0.09 vs EPS C$0.51 year-ago

* Q2 rev down 42 pct to C$44.8 mln

* Raises FY sales volume view

* Sees FY capital spending of C$85 mln

Nov 10 (Reuters) - Canada’s Grande Cache Coal Corp’s GCE.TO quarterly profit dropped about 80 percent, hurt by weaker coal prices that tumbled from year-ago high levels, but topped estimates on lower costs.

For the second quarter ended Sept. 30, the company earned C$9.3 million, or 9 Canadian cents a share, down from C$47.1 million, or 51 Canadian cents a share, a year ago.

Revenue fell to C$44.8 million, as the company sold coal at an average sales price of C$124 a tonne, down from C$223 a tonne, year ago.

The company was expected to report earnings of 2 Canadian cents a share, on a revenue of C$44.1 million, according to Thomson Reuters I/B/E/S.

Cost of sales during the quarter was C$84 per tonne, down 19 percent, largely due to a decrease in costs relating to contractor services, maintenance and diesel fuel, the company said.

Grande Cache raised its sales volume outlook for the year and said it expects sales volumes in the range of 1.5 million tonnes to 1.7 million tonnes. It had earlier forecast sales volumes of 1.3 million tonnes to 1.5 million tonnes.

The increase is due to a continuing recovery in demand from traditional customers and sales to new customers in China, the company said. Shares of the Calgary, Alberta-based company closed at C$3.85 Monday on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore; Editing by Aradhana Aravindan)

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