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Walter Energy posts $100m third-quarter loss

30th October 2013

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Coal major Walter Energy, which mainly produces steelmaking coal in North America and the UK, on Wednesday reported a net loss of $100.7-million, or $1.61 a share, for the third quarter ended September 30.

This compared with the company’s $1.1-billion, or $16.97-a-share net loss a year earlier, when it took a $1.1-billion impairment charge related to its acquisition of Western Coal.

Excluding one-time items, the loss in the period was $1.68 a share, significantly more than the average loss of $1.02 a share that a group of 23 Wall Street analysts were expecting.

Revenue fell nearly 26% to $455.8-million, mainly the result of lower prices of metallurgical coal.

Metallurgical coal sales totalled 2.8-million metric tons, an increase of 7.7% year-on-year, and the cost of sales per ton declined 10.8% to $117.95/t.

Walter Energy said a higher metallurgical coal sales volume in the period, as compared with 2012, had partially offset the decline in coal sales pricing, and lower production costs, including improved metallurgical coal cost performance and continued reductions in selling, general and administrative expenses.

“Demand for our products has remained firm, and we have recently seen an improvement in met coal pricing. We look forward to improved financial performance in the fourth quarter and in 2014,” CEO Walt Scheller said.

The company’s stock shot up $1.17 apiece in early trading on the NYSE, giving back its initial gains later to trade at around $15.92 apiece.

Rival coal miner Arch Coal on Tuesday slashed its production outlook for steelmaking coal, for the second time this year, based on the weak prices.

Walter Energy has 15 mines in three countries and produced 11.7-million metric tons of coal, with sales of $2.4-billion in 2012.

Edited by Creamer Media Reporter

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