Coal producer Walter Energy Inc. (WLT, WLT.TO) said Thursday its performance in the first quarter of 2013 improved from the sequential fourth quarter, led mainly by higher metallurgical coal sales volume and pricing, enhanced production, as well as lower costs.
Walter Energy expects to report first-quarter metallurgical coal sales volume of about 2.8 million metric tons, up nearly 9% from the prior fourth quarter.
Average realized metallurgical coal sales prices are also expected to improve slightly compared with sequential quarter, mainly due to a higher sales volume of low vol hard coking coal and a slight strengthening in the market.
Walter also expects to report that metallurgical coal cash cost of sales declined by over $10 per metric ton, on a sequential basis. This is mainly due to the higher proportion of low vol hard coking coal sales from its Alabama operations and a substantial improvement in cash cost of sales for low vol PCI.
First-quarter metallurgical coal production is expected to total about 2.8 million metric tons, up about 12% from the prior fourth quarter. Metallurgical coal cash costs of production is expected to improve by about 5%.
Meanwhile, sales of thermal coal are expected to total about 380 thousand metric tons in the first quarter, a decline of about 40% from the sequential quarter. As a result of the lower volume, cash cost of sales was higher by about $35 per metric ton due to mining conditions at our North River mine. The company said it would close this mine earlier than planned and expects the closure to occur before year-end.
"Improvements across our operations over the past several months reflect the success of our ongoing initiatives," said CEO Walt Scheller.
"As to the current market, we have seen stronger demand and improved pricing, with second quarter benchmark prices of $172 per metric ton for hard coking coal and $141 per metric ton for low vol PCI. We believe all these factors position us well as we look ahead to the remainder of 2013," added Scheller.
The company plans to release its first quarter results on May 2.
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