Consol swings to Q1 loss owing to lower prices, revenues
TORONTO (miningweekly.com) – US fossil fuels producer Consol Energy has swung to a first-quarter loss as lower realised prices for its natural gas and coal products drove down revenues.
For the first quarter ended March 31, NYSE-listed Consol reported a net lost $97.6-million, or $0.43 a share, compared with a profit of $79-million, or $0.34 a share, in the same period a year earlier.
The results included a $29.3-million loss on commodity derivative instruments, $12.6-million loss from the sale of a gathering pipeline, and $2.9-million in severance. The adjusted earnings before interest, tax, depreciation and amortisation was $176-million, down from $242-million a year ago.
Revenue fell 30% year-over-year to $558.5-million in the first quarter, down from $792.6-million a year earlier. Natural gas revenue dropped 19% to $181.2-million, while coal revenue fell 39.5% to $251.9-million.
Consol had sold its cornerstone Buchanan mine, in Virginia, during the quarter, pushing the company’s cash balance in the bank up to $1.3-billion.
"The Buchanan sale is significant for a number of reasons. Not only does this divestiture support our corporate strategy, it also brought forward substantial value, at a premium multiple valuation.
“That said, this transaction was a win-win for both us and the buyer, who will benefit from this premier mine becoming their flagship operation. For Consol, the sale of Buchanan marks another large step toward executing our strategy of becoming a pure-play E&P company,” Consol president and CEO Nicholas DeIuliis said in a statement.
Consol’s NYSE-listed stock on Tuesday traded 8.09% higher at $14.16, having more than halved in the past 12 months.
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