Walter Energy, Inc the world's leading, publicly traded pure play producer of metallurgical coal for the global steel industry, today announced results for the third quarter ended September 30th 2011.
During the third quarter 2011, Walter Energy produced 2.3 million metric tons of metallurgical coal, consisting of 1.7 million tonnes of hard coking coal and 0.6 million tonnes of low volume PCI. In addition, the Company produced 1.4 million tonnes of thermal coal during the third quarter 2011.
Walter Energy generated operating income of USD 148.7 million, net income of USD 76.2 million for the third quarter 2011. In the third quarter 2010, Walter Energy's results excluded the April 1st 2011, impact from the acquisition of Western Coal Corp and were USD 207.8 million in operating income, USD 136.2 million in net income.
Consolidated revenues for the third quarter 2011 totaled USD 690.1 million and consisted of USD 467.1 million from the US segment, USD 222.7 million from the Canada and UK segment and USD 0.3 million from the Corporate and Other segment. The consolidated average net selling price for hard coking coal increased to USD 263 per metric tonne in the third quarter of 2011, up from USD 243 in the second quarter 2011. The US segment average net selling price increased to USD 259 per metric tonne in the third quarter, up from USD 237 in the second quarter 2011. In the Canadian and U.K. operations, the average net selling price for hard coking coal increased to USD 277 per metric ton, up from USD 262 in the second quarter 2011.
The consolidated average cash cost per ton was USD 132 per metric ton for hard coking coal, USD 143 per metric ton for low-vol PCI, and USD 64 per metric ton for thermal. On a consolidated basis, cash margins per metric ton were USD 131 in the third quarter for hard coking coal, USD 66 per metric ton for PCI, and approximately USD 8 per metric ton for thermal.
The consolidated operating income of USD 148.7 million consisted of USD 112.9 million from the US segment, USD 50.2 million from the Canada and UK segment, and USD 14.4 million in operating losses from the Corporate and Other segment. Consolidated earnings before interest, taxes, depreciation and amortization was USD 198.6 million in the third quarter of 2011 as compared with USD 233.7 million in the third quarter 2010.
Mr Walt Scheller CEO said that "Walter Energy's third quarter financial results were slightly above our expectations for operating income, net income and earnings per share. Consolidated revenues were $690 million, driven by lower volumes than expected, primarily within Canada. The impact of lower volumes was partially offset by higher average pricing. At Mine No 7 in Alabama, production is increasing and we are now out of the area where the geological squeeze has more recently constrained our cutting rates. I am also pleased to report that we expect production from the new longwall panel at Mine No. 7 within the next few days. The early start of this new longwall will help us accomplish record fourth quarter hard coking coal production in the US."
