US coal company Armstrong Energy recorded a loss of US$15 million in 1Q15 on revenue of US$60.3 million in 2Q16, 35.2% lower than the same period in 2015, on the back of lower sales volumes and prices.
Coal sales fell to 1.3 million short t from 2.0 million short t over the three months to the end of June, while the average sales price fell to US$42.7 per short t from US$45.7 per short t the year before.
Also hitting Armstrong’s bottom line, its cost of coal sales per short ton rose by US$1.4 due to higher labour and benefits costs as a higher portion of Armstrong’s operations moved underground. The company also recorded an asset impairment charge of US$3.4 million in the quarter.
The company also said it would close its Parkway underground mine at the end of year when all economically recoverable coal has been depleted.
Despite the loss – which totals US$28.4 million for the first six months of the year – Armstrong believes it has enough existing liquidity to meet requirements through to the end of the year.
The company’s board of directors have also authorised an “exploration of strategic alternatives aimed at strengthening its balance sheet and improving its long-term capital structure,” the company said.
Armstrong produces low-chlorine high-sulfur coal from the Illinois Basin, controlling over 550 million short t of proven and probable reserves in western Kentucky and operating six mines.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/12082016/armstrong-energy-records-2q16-loss-2016-2221/