Alpha Natural Resources loses $111 million in first quarter - Beckley, Bluefield & Lewisburg News, Weather, Sports

Alpha Natural Resources loses $111 million in first quarter

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Alpha Natural Resources reported a net loss of $111 million in first three months of 2013 but touted strong operational execution and safety performance.

The company also claims to have a strong liquidity position, in excess of $2 billion, including $1 billion in cash and marketable securities. The adjusted net loss was about $104 million, nearly double the $58 million in the first quarter of 2012.

"Considering continued difficult market conditions, Alpha delivered solid results during the first quarter of 2013, maintaining a sharp focus on operational execution and building on our recent strategic restructuring," said Kevin Crutchfield, chairman and CEO.  "Our safety performance was outstanding, and stronger than expected shipment volumes and lower unit costs, driven in part by the success of our recent cost control initiatives, helped offset lower realizations on metallurgical coal, resulting in first quarter adjusted EBITDA of $117 million."

Crutchfield said a restructuring plan announced last September is mostly complete.

"Going forward, we will continue to assess the need for further adjustments to our portfolio and marketing strategy where necessary to position ourselves for both sides of the commodity cycle," Crutchfield said.

Revenues were down from $1.9 billion to $1.6 billion compared to the same quarter last year.

"The decreases in total revenues and coal revenues were primarily attributable to lower average realizations for metallurgical and Eastern steam coal and lower steam coal shipment volumes," the first quarter report states.

In the report, Alpha suggests it is less interested in Central Appalachian thermal markets and more interested in expanding opportunities in metallurgical coal production. The inventories of Central Appalachian thermal coal, coal is stockpiled at power plants, has roughly doubled in recent years.

"We believe a significant portion of the decreased consumption of CAPP thermal coal is a structural phenomenon, and Alpha has accordingly substantially reduced its production of CAPP thermal coal through its recent restructuring activities," Alpha wrote. "Furthermore, at today's seaborne thermal coal prices in the Atlantic, most eastern U.S. production is uneconomic, adding to the difficult supply/demand environment and general market weakness." 

Alpha also stated it improved its incident rate by 15 percent from last quarter and improved days lost by 24 percent.

"We applaud the successful efforts of our workforce, and we will continue to focus on continually improving our safety performance and advancing the objective of 'Running Right' at all of our operations," said Crutchfield.