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Corsa sees revenues halve in 2Q16

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World Coal,

Corsa Coal announced a more-than halving of its revenues in 2Q16 compared to the same period in 2015. The company reported revenues of US$18.7 million in the three months to the end of June, compared to US$39.8 million the year before, as sales slumped 179 million short t to 306 million short t.

The company was cash-flow positive on its Northern Appalachian (NAPP) metallurgical and Central Appalachian (CAPP) coals, however, reporting cash margins of US$1.39 per short t and US$2.84 per short t, respectively. The comes on the back of cost reduction initiatives that saw the company’s NAPP variable costs fall 11% from US$66.66 per short t to US$59.35 per short t.

NAPP thermal coal production costs rose substantially to US$46.1 per short t from US$22.7 per short t in 2015, resulting in a negative cash margin per short ton sold of US$2.5.

CAPP margins remained positive despite a significant increase in unit production costs that came on the back of reduction in production levels.

Looking ahead, however, and the company was more positive. “The effect of higher export prices [for metallurgical coal] has already be realised in our 3Q16 shipments and will favourably impact profitability for the remainder of 2016,” said Corsa’s CEO, George Dethlefson. “At our CAPP division […] production levels have the potential to increase based upon ongoing thermal and industrial coal market opportunities.”

The company’s updated full-year guidance now stands at total sales of 1.35 and 1.65 million short t compared to original guidance of 1.525 million – 1.825 million short t on the back of a cut to CAPP volumes to 0.5 – 0.6 million short t from 0.675 – 0.775 million short t.

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