Rhino Resources Partners has fallen from the black into the red over Q3 2014, as the company reports a net loss of US$ 8.9 million compared to a net income of US$ 2.9 million over the same quarter last year.
Total revenues fell from US$ 69.5 million last year to US$ 61.4 million, with coal sales generating US$ 52.3 million of the total, compared to US$ 59.6 million in Q3 2013.
Chris Walton, president and CEO of Rhino’s general partner, blamed the change in financial fortune on “the prolonged weakness in the coal markets”.
Walton added that the company had increased focus on cost and productivity improvements at ongoing core operations, along with a focus on reducing carrying costs of non-core and idled operations. He said that, despite the tough market conditions “our balance sheet remains strong with relatively low debt levels and low legacy liabilities”.
The CEO explained: “During the third quarter, we continued to experience many of the same problems that have been affecting nearly all coal companies. Market conditions remained weak with cool summer temperatures and lower gas prices. At Hopedale, poor rail service continues to constrain the shipments from this operation, while costs remain higher than expected due to unexpected adverse geological conditions encountered in the new 7-seam reserve. In addition, development was slower than anticipated at our new Pennyrile mine due to unforeseen geological conditions, which caused our costs to be higher than anticipated for the quarter. Sales volumes were strong during the quarter at our Castle Valley operation and we completed additional long-term sales agreements through 2016 for coal from this operation.”
Walton also hinted at the “possible divestiture” of certain assets, as the company looks to reduce ongoing carrying costs.
Depressed prices for both metallurgical and thermal coal have impacted Rhino’s bottom line, particularly at its assets in Central Appalachia, where market conditions remain “challenging”, according to Walton. Rhino has temporarily idled another coal mine in the region due to these conditions.
In response to “adverse mining conditions”, Walton insisted the firm was “taking appropriate measures and continues to implement cost improvements” at its various mine sites.
Written by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/31102014/rhino-resources-announces-q3-2014-reports-1521/