Westmoreland Coal recorded a profit of US$30.6 million in 1Q16 on the back of a US$47.9 million income tax benefit. Revenues fell from US$371.5 million in 1Q15 to US$354.7 million in 1Q16 as prices remained soft and power demand weak on warm winter weather.
“Despite weak power demand during the first quarter, which was one of the warmest quarters on record, our mine-mouth and cost-protected model again helped us deliver solid results,” said Kevin Paprzycki, Westmoreland’s CEO.
Overall, the company sold 13.8 million t of coal in 1Q16 – up from 13.5 million t in 1Q15. US coal sales rose by 200 000 t as the company integrated the San Juan Coal Co., which it acquired from BHP Billiton at the end of January.
The company also cut cost of sales from US$301.5 million t to US$273.8 million over the quarter.
The company ended the quarter with US$17.8 million of cash and cash equivalents on hand – US$5.2 million lower than at the end of 1Q15. Its outstanding debt stood at US$1.1 billion – a y/y increase on the back of the San Juan acquisition financing.
Paying down that debt was now a priority, continued Paprzycki: “We have visibility into our cash flow stream because we entered this year with nearly 90% of our tonnes under cost-protected contracts. Our cash generation, considering normal seasonality, will strengthen following the second quarter, which typically experiences the year’s lowest energy demand. We will look to reduce debt later in the year with our increased cash flow.”
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/11052016/westmoreland-coal-announced-1q16-profit-2016-/