Two Virginia-based coal companies report losses for first quarter
- May 3, 2012
A mild winter and low natural gas prices were among reasons cited by Virginia coal companies Thursday as they reported losses for the first quarter.
Bristol-based Alpha Natural Resources Inc., one of the country’s largest coal producers, reported a first quarter net loss of $29.1 million, or 13 cents per diluted share compared to net income of $49.8 million, or 41 cents per diluted share, for the same quarter last year.
“…Unusually mild winter weather and decade-low natural gas prices have significantly reduced domestic steam coal consumption and driven utility inventories to near record levels,” Alpha’s CEO Kevin Crutchfield said in a statement. Alpha already had reduced planned production volumes by 4 million tons before the mild winter. Crutchfield said it is reducing the midpoint of the 2012 shipment guidance by an additional 7 million tons of steam coal.
Next month Alpha celebrates the first anniversary of its merger with Massey Energy, an acquisition that has boosted revenue. Total revenues in the first quarter were $1.9 billion, compared to $1.1 billion for the same period in 2011. The company said that the inclusion of legacy Massey operations contributed estimated coal revenues of $680 million during the first quarter. The company also saw synergy-related savings of more than $150 million at the end of the first quarter and expects that annual figure to be $220 million to $260 million by mid-2013.
Richmond-based James River Coal Co. reported a net loss of $15.7 million, or 45 cents per fully diluted share for the first quarter, compared to a net loss of $7.6 million or 28 cents per fully diluted share for the first quarter for 2011. Peter T. Socha, the company CEO and chairman, said in a statement, “We are very pleased with the way that our entire organization has responded to an extremely weak coal market. Our operations team has made a number of changes to our mine portfolio to both control our cash costs and preserve capital.”