Positive quarter for Alpha

ALPHA Resources reported net profit of $US8.2 million in the third quarter, a big improvement compared with $US5.4 million a year earlier.

Staff Reporter

Total revenues for the Virginia-based company were $US397.7 million, up from $US341.7 million. The company’s steam coal sold for $US41.66 per ton, up 24% during the third quarter, while met coal rose 12% to $US72.49/t.

Revenue from coal sales increased 17% to $US345.2 million on the back of 6.7 million tons sold. However, erratic rail service in West Virginia and the Great Lakes and delayed export shipments from New Orleans dampened sales volumes.

"Alpha's sales volumes were unchanged from the second to the third quarter, but because of the export delays in the Gulf Coast they were weighted much more towards our steam coal business, and steam coal prices are about $US30 a ton lower than met coal," said president and chief executive Michael Quillen.

Metallurgical coal sales are expected to recover next quarter and deliver a gross margin improvement.

Quillen said met demand from the end of the summer on had picked up with prices strengthening.

"In large part this is due to both the rebound in the steel markets in the second half of this year and production difficulties in the Eastern met coal fields, which is putting an added squeeze on met coal supplies."

Alpha’s results do not include the October acquisition of coal producer Nicewonder.

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