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Walter Energy raises coal production while lowering costs

World Coal,

Walter Energy, the producer of metallurgical coal for the steel industry, has announced results for the fourth quarter and full year ended 31st December 2013.

CEO, Walt Scheller, commented: "Operationally, we finished the year with our mines performing well. Our fourth quarter results reflect the ongoing focus on improving safety, reducing costs and increasing productivity.

"For the year, we achieved our cost reduction targets, lowering metallurgical coal cash cost of production per ton by more than 17% and reducing SG&A expenses to an annual run-rate of US$ 80 million. We expect that these accomplishments will continue to yield benefits going forward, and we are focused on achieving further improvements in 2014."

Financial results

Walter Energy reported a net loss in 2013 of US$ 359.0 million, compared with a net loss of US$ 1.1 billion in 2012.

The company reported a net loss of US$ 174.3 million for the fourth quarter of 2013, compared with a net loss of US$ 71.0 million for the fourth quarter of 2012.

Consolidated revenues totalled US$ 472.0 million, compared with US$ 478.8 million in 2012, reflecting a 13.8% increase in metallurgical coal sales volume, more than offset by the impact of lower metallurgical coal prices.

Metallurgical coal

Fourth quarter 2013 metallurgical coal sales volume, including both hard coking coal and low-volatility pulverized coal injection (PCI) product totalled 2.9 million t, an increase of 13.8% compared with 2012.

Hard coking coal sales volume was 2.4 million t, an increase of 15.4% compared with 2012.

Low-vol PCI sales volume totalled 0.5 million t, an increase of 7.5% compared with the fourth quarter of 2012.

Metallurgical coal sales volume in the fourth quarter 2013 increased to 85% of total coal sales volume compared with 79% in the same quarter the year before.

Metallurgical coal production increased 28.3% to 3.2 million t in the fourth quarter of 2013, compared with 2.5 million t in the prior-year period. Production improvements were driven by a significant increase in output from the company's Mine No. 4 in Alabama, along with higher volume at Walter Energy’s Wolverine mine in Canada.

Safety highlights

Walter Energy improved safety performance in 2013. In addition, several mine rescue teams and individuals in the company's US operations won national recognition at the National Mine Rescue and First Aid contest. The company also had an employee inducted into the National Mine Rescue Hall of Fame.

Edited from various sources by Katie Woodward

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