“Despite the weakened economy, Consol was able to achieve outstanding net income and earnings per share. Both our coal and gas segments performed extremely well in these difficult times," Harvey said.
The Appalachian producer posted a net income of $US195.8 million, 260% above the 2008 March quarter, as it continued in the slipstream of higher pricing. It also posted record operating cash flows of $249.8 million.
For 2009, the company has planned coal production at an average realised price of $59.83 per ton, 23% higher than 2008.
Despite the record financial results, cracks did begin to show in the quarter with total coal sales down, as the weak economy reduced coal burn at utilities and the coal needs of steel companies.
"Because of the economy, Consol Energy is working with some of its customers to postpone shipments where needed. We have long-term relationships with our customers that we value highly, but we expect to capture the value for our shareholders in the contracts we have signed," Harvey said.
"One option we're pursuing is spreading the value over future tonnage."
Coal production was 16 million tons for the quarter, down only slightly on the 16.2Mt in the same period last year.
"Consol Energy will match its production with actual customer shipments. We are in the business of creating value for our shareholders, so we will not produce coal just to build inventory. When shipments rebound, so will our production."
Consol has already closed its Buchanan and Mine 84 complexes.
Operating costs for the quarter were $32.30/t – 14.1% higher, with supply and maintenance costs increased and installation of higher-grade seals as well as a higher number of seals built contributing.
Commenting on the costs, Harvey said idling of some of Consol's higher-cost mines in the middle of the first quarter could help mitigate unit cost pressures during the rest of 2009.
Looking ahead, Harvey was relatively positive.
"Clearly, coal stockpile levels at power generators and the domestic gas storage level is impacting near-term pricing," he said.
"However, we believe that the rapid response by coal and natural gas producers will bring the current oversupplied situation back to equilibrium more rapidly than in previous downturns.
“We believe that stockpile levels for utilities burning Northern Appalachian coals are still at significantly lower levels than those burning PRB coals. In addition, energy companies with less than stellar financial positions could find it very difficult to obtain reasonable financing terms to maintain their operations.
“We believe that this will impact supply and could set the stage for higher coal and natural gas prices as early as 2010."
Harvey said Consol was aggressively managing coal production at its mines, carefully managing relatively low inventory levels and monitoring liquidity during this period of tight credit markets and a cloudy economic outlook.