August 14, 2009 / 2:14 PM / 9 years ago

UPDATE 1-Western Cdn Coal profit dives on weak coal prices

* Q2 EPS C$0.02/shr vs year-before C$0.27/shr

* Revenue down 42 pct on weak prices, lower shipments

* Raises 2010 shipment forecast on higher prices

* Shares rise 7 Canadian cents to C$3.44 (In U.S. dollars, unless noted)

TORONTO, Aug 14 (Reuters) - Metallurgical coal producer Western Canadian Coal WTN.TO said on Friday its first-quarter profit plunged 94 percent as it sold fewer tonnes of coal and prices dropped sharply.

However, the Vancouver-based company boosted its 2010 coal shipment forecast due to rebounding prices, signaling rising demand.

The company, which took over London-based Cambrian Mining Plc last month, earned C$3.4 million ($3.12 million), or 2 Canadian cents a share, in the first quarter, ended June 30, of its 2010 financial year.

That was down from a profit of C$59.7 million, or 27 Canadian cents a share, in the year-before period.

Revenue slumped 42 percent to C$75.7 million as realized coal prices dropped to $147 tonne from $221 per tonne. Realized prices during the quarter would have been lower if not for carry-over tonnage from the previous year at 2008 prices.

Coal shipments, which include some thermal coal, fell to 435,000 tonnes from 583,000 tonnes.

Prices for metallurgical coal, which is used in the steelmaking process, plunged last year as global demand for construction materials dried up.

However, metallurgical coal prices have rebounded somewhat this year, and are currently at $150 to $160 a tonne, Western Canadian said, allowing the company to raise its 2010 total shipment forecast to 2.4-2.6 million tonnes from its previous estimate of 2.2 million tonnes.

Western Canadian also said it is reviewing its 2010 capital plans to increase production to meet demand.

Shares of the company, which owns three mines in British Columbia and two mines in West Virginia, were up 7 Canadian cents at C$3.44 on the Toronto Stock Exchange on Friday morning.

$1=$1.09 Canadian Reporting by Cameron French; editing by Peter Galloway

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