For the period ended June 30, the Tennessee-based miner reported a net loss of $9.4 million, down from the $14.5 million net loss it reported in last June’s quarter.
Revenues were $4.7 million, down significantly year-on-year from $23.1 million but up from this March quarter’s $4.08 million.
On a positive note, prices were up to $96.19 per ton from $63.67 during 2012’s comparable quarter and $68.16 in the March 2013 period.
“Xinergy made significant strides during the quarter, as we positioned South Fork for long-term success while continuing to take steps to rationalize our cost structure and optimize our balance sheet and liquidity amidst challenging market conditions,” CEO Matt Goldfarb said.
“Our West Virginia team deserves tremendous credit for bringing our South Fork project on-line in a timely and cost-efficient manner, and for achieving operating efficiencies reflected in our South Fork cash costs trending to below $100/ton.”
The company felt the continued deterioration of the global seaborne coking coal market over the quarter from a scenario of structural oversupply and persistent demand weakness from a deceleration in anticipated Chinese steel production growth and fiscal uncertainty across Europe and other developing economies.
“With spot pricing weakening during the quarter to below the $145/ metric tonne benchmark level, and then recovering somewhat in early August on the back of positive Chinese industrial production data, we view today's coking coal market as extremely dynamic and in the process of re-calibrating,” Goldfarb said.
“We feel confident that our combination of premium quality and low cost position at South Fork will prove to be a valuable growth driver as market conditions normalize.”
In the meantime, Goldfarb said, Xinergy was making efforts to safeguard its balance sheet to withstand the rough waters the market is still feeling.
That includes the potential sale of non-core assets, working capital initiatives, further fixed cost rationalization and operational discipline to match production to demand.
One of those areas of focus is capital expenditures, which were $12.6 million during the second quarter. The total includes the substantial completion of the company’s South Fork infrastructure project as well as the start of contraction at its Raven Crest preparation plant.
Capital expenditures for the first half of 2013 stand at $26.6 million, with whole-year capex projected at about $40 million including a previously unbudgeted equipment debt pay down.
