Walter Energy (WLT) Updates on Q2 Production, Operations
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Walter Energy, Inc. (NYSE: WLT) provided preliminary operating results for the second quarter 2013.
"We significantly reduced costs in the second quarter led by strong performance from our Alabama premium hard coking coal mines," said Walt Scheller, Chief Executive Officer. "I am pleased with our operational progress, however our financial results for the quarter still reflect the significant ongoing weakness in the global met coal market. While the short-term outlook for global met coal pricing remains depressed, we continue to maintain our focus on operating safely and efficiently, lowering costs and improving our financial performance."
Metallurgical Coal Production
Second quarter 2013 metallurgical (met) coal production is expected to total approximately 2.9 million metric tons (MMTs), up approximately 7% compared with first quarter 2013. Higher production in the quarter was driven by an increase of 0.4 MMTs from the Company's low-volatility (low-vol) and mid-volatility (mid-vol) mines in Alabama. Met coal cash cost of production per metric ton (MT) is expected to have declined by more than 10%, or over $10 per MT, compared with the first quarter of 2013. Production cost per MT in the Company's low-vol and mid-vol mines in Alabama declined 14%, while per ton met cash costs of production in the Canadian operations also declined despite lower production volumes.
Metallurgical Coal Sales
Walter Energy expects to report second quarter 2013 met coal sales of approximately 2.4 MMTs, a decrease from the first quarter of approximately 0.3 MMTs, primarily due to late arrival of vessels. The Company expects met coal cash cost of sales per MT to increase by approximately 2% in the second quarter of 2013 as a result of a charge to restate ending inventory at the lower of cost or market ("LCM") that reflects a projected decline in third quarter 2013 met coal and low-vol PCI prices. Excluding the LCM charge to ending inventory, met coal cash cost of sales per MT would be slightly improved versus the first quarter of 2013.
"We significantly reduced costs in the second quarter led by strong performance from our Alabama premium hard coking coal mines," said Walt Scheller, Chief Executive Officer. "I am pleased with our operational progress, however our financial results for the quarter still reflect the significant ongoing weakness in the global met coal market. While the short-term outlook for global met coal pricing remains depressed, we continue to maintain our focus on operating safely and efficiently, lowering costs and improving our financial performance."
Metallurgical Coal Production
Second quarter 2013 metallurgical (met) coal production is expected to total approximately 2.9 million metric tons (MMTs), up approximately 7% compared with first quarter 2013. Higher production in the quarter was driven by an increase of 0.4 MMTs from the Company's low-volatility (low-vol) and mid-volatility (mid-vol) mines in Alabama. Met coal cash cost of production per metric ton (MT) is expected to have declined by more than 10%, or over $10 per MT, compared with the first quarter of 2013. Production cost per MT in the Company's low-vol and mid-vol mines in Alabama declined 14%, while per ton met cash costs of production in the Canadian operations also declined despite lower production volumes.
Metallurgical Coal Sales
Walter Energy expects to report second quarter 2013 met coal sales of approximately 2.4 MMTs, a decrease from the first quarter of approximately 0.3 MMTs, primarily due to late arrival of vessels. The Company expects met coal cash cost of sales per MT to increase by approximately 2% in the second quarter of 2013 as a result of a charge to restate ending inventory at the lower of cost or market ("LCM") that reflects a projected decline in third quarter 2013 met coal and low-vol PCI prices. Excluding the LCM charge to ending inventory, met coal cash cost of sales per MT would be slightly improved versus the first quarter of 2013.
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