Xinergy announced a net loss of $US1.9 million for the three months ending March 31. This compares with a net income of $1.7 for the same three-month period last year.
The Knoxville-based company’s total coal sales revenue was down $US25.9 million, or 13.6%, to a minimal $US4.1 million for the quarter down from $29.9 million for the same period last year.
Adjusted EBITDA was $3.6 million for the March 2013 quarter, compared to $3.7 million for the previous corresponding period.
“Against a backdrop of continuing broader market weakness, Xinergy made substantial progress during the first quarter towards moving our world-class South Fork project closer to completion, while maintaining a disciplined approach towards cost containment and balance sheet liquidity,” chief executive officer Matt Goldfarb said.
Toronto Stock Exchange-listed Xinergy’s South Fork metallurgical mine in Greenbrier County, West Virginia, is the only mine it has in production.
"With South Fork anticipated to ramp production this summer, we are very pleased with unit cost trends realized late in the first quarter and early in the second quarter. Although we remain cautious on the met coal market in the short term due to weak global steel demand and steel mill overcapacity, we see production curtailments by coal producers continuing on a global basis until a more rational pricing environment prevails.
The cost of coal sales was $5.9 million for the quarter, a decrease of 19.3% from $30.5 million for the three months ended March 31, 2012. The decrease was attributable to a reduction of 365,741 tonnes sold, due to the company’s True Energy metallurgical coal operation in Wise County, Virginia and its Raven Crest thermal coal operations in Boone County, West Virginia, being idle.
And 59,956 tonnes of coal was sold at a price of $68.16 per tonne, down from sales of 425,697 tonnes at a price of $70.35 during the previous corresponding period.
Production also decreased from 380,173 tonnes to 51,152 tonnes.
“We anticipate that more balanced met coal market conditions will present opportunities for outsized returns for premium quality assets over the medium term, and are positioning our assets accordingly,” Goldfarb said.
In February, Xinergy completed the sale of its Straight Creek and Red Bird thermal mines in Kentucky to affiliates of JW Resources in a $US47.2 million deal as a strategic move to allow it to “focus on its strategy of building out a high-quality, metallurgical coal portfolio,” the company said in its report.
Xinergy closed the quarter with $27.6 million cash in the bank and a total liquidity of $37.4 million.