Alpha Natural Resources CEO Kevin Crutchfield said the actions the company had taken to rationalise its cost base and strengthen its balance sheet were positively impacting those aspects of its business it could control.

“Adjusted cost of coal sales per [short] ton in the east continues to decrease, averaging $65.73 in the first quarter and beating the midpoint of our annual expectations of $67, allowing us to reduce our eastern cost of coal sales guidance to a midpoint of $66.50,” Crutchfield said.

“We're particularly pleased that we've been able to take substantial costs out of our business while maintaining our commitment to ‘Running Right’

“Financially, we remained focused on prudent balance sheet management and, as a result of our cost management initiatives and proceeds from the exchange of our joint venture interest in Alpha shale, we increased Alpha’s total liquidity to more than $2.1 billion with cash, cash equivalents and marketable securities of nearly $1.2 billion.

“This allows us to maintain our financial flexibility, continue our cyclical resilience and position Alpha to take advantage of potential improvements in the coal markets when they occur.

“We also reduced our outstanding 2015 convertible debt to $159 million from $194 million, as part of our ongoing efforts to manage our maturities effectively.”

Crutchfield said oversupply remained the most significant challenge in the coal markets, particularly in the seaborne segment.

He noted that the company was lowering its metallurgical coal shipment guidance for the year to 15-18 million short tons, down from the previously disclosed16-20Mt.

“Alpha has a long track record of reacting quickly and appropriately to market issues and we are carefully monitoring our production levels in light of strong headwinds,” he said.

“While domestic thermal prices have firmed up, the seaborne thermal and metallurgical coal markets remain difficult.

“Alpha believes, however, that metallurgical coal prices have bottomed and will begin to improve in the latter part of the year and into 2015 and that the company is well positioned to continue managing its costs and balance sheet in the interim.”

Total revenues in the first quarter of 2014 were $1.1 billion compared with $1.3 billion in the first quarter of 2013 and coal revenues were $1 billion, down from $1.1 billion in Q1 2013.

The decreases in total revenues and coal revenues were primarily attributable to lower average realisations and lower shipments of metallurgical and steam coal.