For the period ended September 30, the company reported a net income of $US9.2 million, down from $9.8 million in the third quarter of 2009. Net income also slumped year-on-year, to $52.3 million from $54.2 million.
Despite cost increases and a decrease in shippable output, total coal sales revenue went up to $171.42 million from $168.32 million a year earlier. In the June quarter, JRC posted revenues of $183.05 million.
The producer’s total coal available to ship dropped to 2.16 million tons from 2.4Mt, while cost of coal sold rose to $106.02 per ton from $103.95/t in the third quarter of 2009.
James River chairman Peter Socha said the company was generally pleased with the results and highlighted the company’s continued efforts to generate net income and cash flow from operations.
“Like every other coal company in our geographic area, our costs and productivity have been impacted by state and federal regulators,” he said.
“Our operations team has done an excellent job of making all of the necessary adjustments that have been requested. As these adjustments are completed, we expect the impact on costs and productivity to be reduced.”
James River chief operating officer CK Lane said he was “disappointed” in the production and cost issues during the period, but that the financial impact of increased regulatory activities at both the federal and state level would reduce over time.
“I am very pleased with our entire operations team as they continue to adjust to a new regulatory environment," he said.
The producer spotlighted the performance of its Old House Branch operation in Kentucky, which received the prestigious Sentinels of Safety Award from the National Mining Association and the US Mine Safety and Health Administration in the September quarter. The mine topped the Large Underground Coal classification, having logged 175,629 man-hours without a single lost-time or restricted duty injury.
Old House Branch also earned the distinction of safest large underground mine from the Kentucky Coal Association and Kentucky Environmental and Public Protection Cabinet for the Barbourville District.
Looking forward, James River said it had fortunately been strong in the contracting area; its sales agreements from 2008 and 2009 allowed for income generation and free cash flow during the periods of soft coal markets and economic weakness.
“As a result of these agreements, we believe that we are well positioned for a very profitable year in 2011,” Socha said.
“Looking forward to 2012 and beyond, we are beginning to see clear signs that the coal markets will improve as we move through the coming year. We will continue to monitor these signs and prudently manage our contract portfolio for the benefit of our stockholders."