Corsa Coal Corp., a premium quality metallurgical and thermal coal producer, has reported financial results for the three and nine months ended 30 September 2015.
Despite a tough coal pricing environment, Corsa achieved positive adjusted EBITDA at its Northern Appalachia (NAPP) and Central Appalachia (CAPP) divisions, as well as on a consolidated basis for the three and nine months ended 30 September 2015.
NAPP productivity improvements and cost containment efforts have been successful with the cash production cost per ton sold for metallurgical coal decreasing 11.2% from the third quarter 2014.
The Quecreek mine was restarted in May 2015 as a result of securing a long-term thermal coal sales contract that allowed Corsa to economically mine the metallurgical and thermal coal reserve base.
NAPP continues to aggressively manage its cost structure. The mines idled during 1Q15, as well as other inactive deep mining operations, were sealed, except the Horning mine, in an effort to significantly reduce idle mine costs. NAPP incurred idle mine costs of US$2 358 000 during the first nine months of 2015, which is expected to dramatically decline over the balance of the year as a result of these mines being sealed.
Additionally, Corsa successfully consolidated its coal processing plants in 2Q15, resulting in significant operating cost savings.
CAPP improved upon its 1H15 performance by generating adjusted EBITDA of approximately US$2 190 000 during 3Q15. The division also has substantially completed the face up for the Cooper Ridge Deep Mine. According to the company, this mine has recently commenced production in the October 2015 and will strategically reposition CAPP into the specialty coal and industrial coal markets, which typically generate premium pricing.
Key Operating Metrics for the three months ended 30 September 2015:
- NAPP metallurgical coal sales of 145 000 short t.
- NAPP realised price per short t sold for metallurgical coal of US$73.32.
- NAPP cash production cost per shirt t sold for metallurgical coal of US$66.90, an improvement of 11% over the same time in 2014.
- CAPP thermal coal sales of 222 000 short t.
- CAPP realised price per short t sold for thermal coal of US$67.29.
- CAPP cash production cost per short t sold for thermal coal of US$53.74.
George Dethlefsen, CEO, commented, "As the coal markets have continued to weaken over the course of 2015, Corsa's strong operational performance and cost reduction initiatives have enabled the company to achieve positive adjusted EBITDA overall and at both the NAPP and CAPP divisions. We continue to strategically position both divisions to achieve the highest possible realised pricing for our coals, and our coal qualities, infrastructure and logistics enable us flexibility in serving several markets. Our cost cutting initiatives and asset rationalisation programs have proven to be successful over the course of this year, and we expect further benefits from these programs into 2016.”
Dethlefsen concluded: “We believe that our advantaged position on the delivered cost curve, premium coal qualities and financial sponsorship will position Corsa to capitalise on opportunities in this distressed coal market. We see continued supply rationalisation in the domestic metallurgical space in the coming months, which over time, should serve as a catalyst for improved pricing."
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/coal/13112015/corsa-coal-reports-latest-financial-results-3154/