However, higher prices during the period helped drive revenue up by 18% to $518.8 million. Other revenues increased 73% to $16.1 million thanks to income from machine rebuilds and several other factors.
The full year looked much brighter overall for the producer, highlighted by a new record high net income of $165.5 million – well above last year’s reported total of $27.7 million.
Alpha president Kevin Crutchfield said the global financial downturn had left the master limited partnership’s primary customers making production cuts which in turn cut into Alpha’s bottom line.
“There have been no less than 80 separate production cuts announced by steel companies since October, a development that dramatically reduced their raw material requirements at the end of 2008," said Crutchfield.
“Such draconian actions create a lot of short-term pain, but also hopefully accelerate the eventual recovery in iron and steel production as apparent demand outgrows available supply.
“Still, there's no denying that our expectations are tempered and outlook cautious as we enter 2009."
During the final quarter Alpha decided to terminate a definitive merger agreement with Cliffs Natural Resources which was poised to purchase all of the company’s outstanding shares. The terms of the companies’ settlement included a $70 million payment from Cliffs to Alpha.
Alpha also announced in December it would close its troubled Whitetail Kittanning underground operation in West Virginia, managed by subsidiary Kingwood Mining. The mine, which is set to shut down this month, produced 1.1 million tons last year.
“The decision to close the mine and support facilities resulted from geologic conditions, including adverse roof conditions, and regulatory requirements that rendered the coal seam unmineable at the location,” officials said of the decision.
On the positive side, however, the company reported a fourth consecutive year of improvements to its safety metrics and marked zero lost-time accidents in the final month of the year.
Across Alpha’s operations, the lost-time accident rate for 2008 was 20% better than last year and a notable 29% better than similar mining operations in its class.
Looking ahead to the new fiscal year, Alpha management said its “immediate priorities” were preserving current cash flows and maintaining margins.
As 2009 gets underway, the company has 90% – 12Mt – of its planned production committed and prices are at an average $19 per ton higher than last year.
“Of particular importance for Alpha's remaining planned metallurgical coal production are the upcoming negotiations for international met coal contracts,” Alpha said.
“Currently there's no precise indication where prices will settle out for the various coking coal qualities.”