Walter Energy reports production rise

AHEAD of its fourth quarter and 2012 full-year financial results conference next month, Alabama producer Walter Energy has released much-improved numbers including a production jump of more than 30%.

Donna Schmidt
Walter Energy reports production rise

The company, which operates mines in the US as well as Canada and the UK, reported 11.7 million metric tons of metallurgical coal for 2012, up 34% year-on-year from 8.7Mt in 2011.

In the final quarter, Walter had a total of 2.5Mt of met production, which it attributed to the implementation of a reduced operating schedule to better meet lower global demand and pricing.

It said Sales were also up 20% for the year to 10.4Mt from 8.7Mt and Q4 sales volume totaled 2.5Mt.

Walter noted that about 200,000 metric tons of its contracted shipments had been delayed into this year but it cited rail and port availability issues for the push. As such, that tonnage was not included in its sales totals.

Global coal markets did have an impact on the producer’s price totals over the prior quarter, with prices averaging $US152 per metric ton for hard coking coal in Q4, compared to $198/t in Q3.

Q4 prices for low-volatile pulverized coal injection coal averaged approximately $129/t, versus $160/t in Q3.

After Wednesday morning’s announcement, financial analyst Dahlman Rose told Benzinga it had upgraded Walter’s shares to a “buy” status on a brighter met outlook.

“We are upgrading WLT … to buy from hold based on an improving outlook of the global met coal market,” the firm said.

“In our view, recent global coking coal supply issues and spot market price improvement have provided an attractive entry point for the equities ahead of our expectation of an upward move in the commodity.”

However, it noted that any bullishness was “not an earnings call”

“We are looking through what we expect to be tempered commentary from coal companies during the [Q4 2012] earnings season,” it said.

Walter Energy has set its earnings conference for February 21 at 9am eastern time.

Its shares closed on Tuesday at $38.62.


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