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Corsa announces 1Q16 loss but sees light ahead

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World Coal,

Corsa Coal reported a quarterly loss of US$8.3 million for the three months ending 31 March – but sees the chance for more positive times ahead on the back of rises to metallurgical coal prices. According to the company, prices rose 10% in 1Q16 and are up about 25% in 2016 so far.

“We have seen a significant improvement in pricing for steel and raw materials used in the steel value chain in 2016, including metallurgical coal,” said Corsa’s CEO, George Dethlefsen.

“We believe that January 2016 marked a 12-yr bottom for metallurgical coal prices and that renewed infrastructure spending and the effects of metallurgical coal production cuts will cause prices to recover to a point on the supply cost curve where producers are cash margin positive again.”

Corsa reported cost of sales of US$19.7 million against revenues of US$16.6 million t in 1Q16. Total sales were 248 000 short t. This marked a fall in sales of 111 000 short t as the company continued efforts to cut costs. Revenues fell 47% on 1Q15 as a result – but cost of sales fell by almost two-thirds – 62.6%

“We will continue to execute on our plans to reduce our controllable costs and lower our fixed cost profile in 2016,” continued Dethlefsen. The company reduced cost per ton sold at its Northern Appalachian metallurgical coal by 18.92% compared to 1Q15, while its Central Appalachian costs for thermal and industrial coal production falling by 20.8%.

Looking ahead, Corsa’s open sales positions and ability to increase production, as the year progresses will enable it to “benefit immediately from these increases in prices,” the company said. It held its full year sales guidance at 1.525 million – 1.825 million short t.

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