James River chairman and chief executive officer Peter Socha said markets remained soft during the quarter, particularly for metallurgical coal.

“The thermal markets are still weak but we can see several factors that may lead to improvement later this year and into 2014,” Socha said.

“The met markets have clearly weakened during the past several months.

“We are a little more cautious about met than we had been earlier this year.

“We have started to take definitive action to strengthen our balance sheet and improve our liquidity position during this period of soft coal markets.”

James River's revenue declined to $US160.1 million, down from $277.3 million in the same period a year earlier.

However, during the second quarter, the company cut costs by 36%.

The company announced in March that it had idled five mines, reduced output at others and was undergoing further restructuring due to the impacts of a weak global market.

“We continue to be pleased with our mine operations,” Socha said in the company’s Q2 report.

“They are doing an excellent job of managing their people, costs, capital and assets during a difficult time in the coal industry.”

The company posted a net profit of $52.6 million, or $1.16 a share, compared with the net loss of $25.8 million, or 74c a share for Q2 2012.

The net profit was boosted by a pre-tax gain of $101.2 million due to the company swapping $90 million in debt due in 2015 for $123.3 million in 10% notes due in 2018.

The company’s total coal production was 2059 tons, compared to 2539t during the same quarter last year.

Coal shipments fell 26% to 2.16 million tons in the second quarter and price per ton was down 22% to $69.72, leading to reduced coal sales revenue of $150.5 million.

The producer’s available liquidity rose slightly to $108.8 million as of June 30 from $107.2 million as of March 31.

James River has eight operating subsidiaries located throughout eastern Kentucky, southern West Virginia and southern Indiana.