Commodities & Metals
Struggles to Continue for Coal Miner Alpha Natural Resources
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For the full year, the company posted an adjusted EPS loss of $2.15, compared with a net loss of $0.94 in 2012. Revenues totaled $5 billion, down nearly 30% from $7 billion in 2012. The consensus estimates called for a net loss of $2.28 per share on revenues of $5.04 billion.
The coal miner’s CEO said:
2013 was a challenging year for Alpha and the coal industry. After completing an extensive restructuring initiative in 2012, we announced further cost reductions in the fall of 2013 to better match our production and overhead expenses with current and anticipated market conditions. … We have also actively managed our balance sheet to improve financial flexibility and enhance cyclical resilience by opportunistically accessing the capital markets and agreeing to monetize a portion of our Marcellus shale gas acreage.
Sales of coal fell from 25.9 million tons in the fourth quarter of 2012 to 20.6 million tons in 2013. The company’s weighted average margin per ton fell from $17.45 to $4.57. The recent bouts of very cold weather have increased demand for thermal coal and set “firmer” prices, but the market for metallurgical coal used in steelmaking continues to be “very challenging.”
In its outlook, Alpha says it now expects to ship between 77 million and 90 million tons of coal in 2014. The company has already committed and priced 56% of its expected 2014 shipments of met coal at an average per ton realization of $94.66, 76% of its thermal coal shipments at a price of $58.88 and 98% of its western coal shipments at $12.12 a ton.
The company’s costs for thermal coal for 2014 is expected in a range of $64 to $70 per ton, while western coal costs per ton are expected to range from $9.50 to $10.50 a ton.
The consensus estimates for the first quarter of 2014 call for an EPS loss of $0.61 on revenues of $1.14 billion. For the full year, the miner is expected to post a net loss of $2.07 per share on revenues of $4.63 billion.
Shares were down 1.1% in premarket trading Wednesday, at $5.20 in a 52-week range of $4.78 to $9.90. The Thomson Reuters consensus target price for the shares was around $7.60 before this report.
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