On Wednesday this week, Warrior Met Coal, Inc. (Warrior) announced results for the first quarter of 2019. Warrior is the leading dedicated US-based producer and exporter of high quality metallurgical coal for the global steel industry.
Warrior reported first quarter of 2019 net income of US$110.4 million, or US$2.14 per diluted share, compared to net income of US$178.7 million, or US$3.36 per diluted share, in the first quarter of 2018. Adjusted net income per share for the first quarter of 2019 was US$2.30 per diluted share compared to US$3.42 per diluted share in the first quarter of 2018. The company reported Adjusted EBITDA of US$181.0 million in the first quarter of 2019, compared to Adjusted EBITDA of US$216.4 million in the first quarter of 2018.
“Warrior’s results in the first quarter reflect the continuing strong demand from our customers for our premium metallurgical coal,” commented Walt Scheller, CEO of Warrior.
“We remain focused on maximising our production to take advantage of the favourable pricing environment, and, to that end, we completed another strategic longwall move at the end of the quarter. In light of the current environment, we are pleased to be maintaining our sales and production guidance for the year and to be continuing our commitment to returning capital to our shareholders.”
Operating results
The company produced 2.3 million short t of metallurgical coal in the first quarter of 2019, 9.5% more than the amount produced in the first quarter of 2018. Sales volume in 1Q19 was 2.1 million short t which is consistent with 1Q18.
Additional financial results
Total revenues were US$378.3 million for the first quarter of 2019, including US$369.7 million in mining revenues, which consisted of metallurgical coal sales of 2.1 million short t at an average net selling price of US$176.37 per short t, net of demurrage and other charges. Warrior continued to capitalise on a favourable pricing environment in the quarter by selling its metallurgical coal at 98% of the quarterly Australian premium low-volatility hard coking coal (HCC) index average price (the Australian LV Index).
Cost of sales for the first quarter of 2019 were US$182.6 million, or 49.4% of mining revenues, and included mining costs, transportation and royalty costs compared to US$190.7 million, or 46.2% of mining revenues in the same period of 2018. Cash cost of sales (free-on-board port) per short t decreased to US$86.80 in the first quarter 2019 from US$89.82 in the first quarter of 2018, primarily due to higher production volume and lower spending. Selling, general and administrative expenses for the first quarter of 2019 were US$8.9 million, or 2.4% of total revenues. Depreciation and depletion costs for the first quarter of 2019 were US$22.2 million, or 5.9% of total revenues.
Warrior incurred interest expense, net of US$8.6 million during the first quarter of 2019.
Income tax expense was US$28.0 million in the first quarter of 2019 and represents a non-cash expense that reflects the utilisation of the company’s net operating losses (NOL). The company did not have income tax expense in the first quarter of 2018 due to a full valuation allowance recorded against deferred income taxes.
To read the full report: http://investors.warriormetcoal.com/news-releases/2019/05-01-2019-210736928