North American Coal reported an operating profit of US$4.8 million in 2Q16 on revenues of US$23.1 million. This represents a year-on-year doubling of the company’s operating profits, despite a fall in revenues from US$37.9 million in 2Q15.
Sales were relatively stable, totaling 7.3 million short t of coal delivered compared to 7.4 million short t in 2015.
At the end of 2015, the company ceased mining operations at its Centennial operation in Alabama. Centennial had lost US$6.5 million in 2Q15 on earnings of US$11.9 million. In 2Q16, Centennial’s operating loss was significantly reduced to US$1.9 million.
Excluding Centennial, the company reported an adjusted operating profit of US$6.7 million and adjusted revenues of US$22.8 million in 2Q16 compared to an adjusted profit of US$8.9 million and adjusted revenue of US$26.9 million in 2Q15.
The fall in adjusted operating profit during 2Q16 resulted from higher selling, general and administrative expenses from higher employee-related costs and professional fees, as well as fall in royalties and other income and lower operating results at the company’s consolidated mining operations.
Looking ahead and the company expects and increase in its coal sales compared to 1H16. Despite this, the company is forecasting a fall in income in the second half of the year due to an expected fall in income from its Mississippi Lignite Mining Co. subsidiary, where the cost of sales is predicted in rise.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/03082016/north-american-coal-announces-2q16-profit-2016-2150/