Arch Coal has announced that lower-than-planned shipment levels in the Powder River Basin, combined with reduced production levels at the Mountain Laurel complex in Appalachia, will impact its fourth quarter 2013 financial results.
Powder River Basin
In the Powder River Basin (PRB), Arch's Q4 2013 shipment levels decreased by more than 15% from Q3 levels due to rail service issues on the Joint Line. Arch's Q4 shipments were impacted as its current mix of sales contracts skews more heavily toward customers using the rail operator with the majority of the shortfall. The company noted that this shipment shortfall had a predictable increase in Q4 unit costs in the region. Additionally, the lower-than-expected shipments in Q4 caused thermal volumes for 2013 to be below the company's previous expectations.
"Although rail disruptions impacted our PRB operations in the fourth quarter, we would expect to make up a majority of those shipments during 2014 as rail service improves throughout the year," explained Arch CEO, John Eaves.
Arch Coal has encountered challenging geologic conditions in the current longwall panel at the Mountain Laurel complex in Appalachia. Due to these conditions, Q4 2013 production at the mine decreased by 40% compared to Q3 levels. Consequently, the company's full year 2013 metallurgical coal sales volumes were slightly below the low end of its previous expectations.
Arch Coal's Q4 2013 earnings release will be issued before the market opens on 4th February. The company also will discuss its Q4 and full year 2013 financial results in a conference call that will be broadcast live at 10am Eastern Time.
Adapted from press release by Katie Woodward
Read the article online at: https://www.worldcoal.com/coal/22012014/arch_coal_q4_2013_results_explained_437/