Walter Energy has announced results for the second quarter of 2014.
CEO, Walt Scheller, said: "Our operations performed well in the second quarter. We controlled costs, reduced inventories, and had solid coal production and sales despite idling our Canadian mines. In addition, we kept tight control over our capital spending as well as selling, general and administrative costs.
"We also improved liquidity and financial flexibility through our recent successful notes offering. I believe we have made great strides in positioning the Company to manage through the current difficult market for met coal."
Walter Energy reported a net loss of US$ 151.4 million in Q2 2014, compared with a net loss of US$ 34.5 million in Q2 2013.
Second quarter consolidated revenues totalled US$ 378.4 million, compared with US$ 441.5 million in Q2 2013, reflecting a decrease in average met coal selling prices.
In April 2014, the company announced its plans to begin idling its mining operations in Canada, including the Wolverine and Brazion coal mines in British Columbia.
The Wolverine mine was placed on idle status in April, and the Brazion mining operations were idled in June. Costs recorded in the quarter for idling these mines totalled US$ 18 million.
An impairment charge of US$ 23.0 million was also recorded for the estimated loss on sale of the Blue Creek Coal Terminal assets.
EBITDA for the quarter was a loss of US$ 17.2 million, and adjusted EBITDA was US$ 11.6 million, compared with US$ 36.7 million for the second quarter of 2013.
Met coal sales volumes in the second quarter, including hard coking coal and low-vol pulverised coal injection product was 2.7 million t, representing an increase of 0.3 million t from the prior year quarter.
Met coal cash cost of sales for the second quarter of 2014 averaged US$ 99.70 per million t, down 18.3% compared with Q2 2013, driven by continued improvement in mining costs.
Met coal production was 2.4 million t in Q2 2014, compared with 2.9 million t in the prior-year period, with the decrease primarily resulting from the idling of the company’s Canadian mining operations.
Walter Energy expects full-year 2014 met coal production to be between 9.0 and 10.0 million t and full-year 2014 met coal sales volume to total between 9.5 and 10.5 million t, a reduction from the previous outlook of 10.5 to 11.5 million t, primarily because the company's principal coal transportation provider at the Brule mine in Canada ceased operations in June.
Adapted from press release by Katie Woodward
Read the article online at: https://www.worldcoal.com/coal/01082014/walter-energy-reports-q2-2014-results-1159/