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Massey releases two year prediction

VIRGNIA-based Massey Energy has responded to pressure at the Lehman Brothers conference in New York on Thursday to release detailed projections for 2005 and 2006, saying it expects continued increasing cost pressures through the next two years.

Angie Tomlinson
Massey releases two year prediction

The Company has committed substantially all of its projected 2005 sales tonnage at an average price of more than $40 per ton and suggested its cash cost per ton may total $32, if the tight labor market continues.

For 2006, it has currently committed 25 million tons, with approximately 25Mt remaining uncommitted. The average price per ton for all 2006 tonnage is currently expected to meet or exceed $48.

Massey said although it expected to continue to experience increasing cost pressures, 2006 operating margins could be in the range of 30%.

The Company also reiterated that it did not expect other net income (a non-GAAP measure) in 2005 and 2006 to vary significantly from 2004 other net income.

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