The Q1 loss includes charges of $4.9 million, net of tax, related to curtailing production at the Willow Creek mine and $4.4 million, net of tax, primarily related to proxy contest expenses.
Excluding these items, adjusted net loss for the quarter was $40.1 million or $0.64 per share.
Revenues for Q1 declined from $632 million in 2012 to $491 million this year, with Walter citing industry-wide lower metallurgical coal prices for the reduction.
“In the first quarter, we made continued progress on our key strategic initiatives, most notably on our aggressive cost reduction efforts,” chief executive officer Walt Scheller said.
“While we have seen stronger demand in 2013, met coal pricing has improved only marginally and the recovery in the global economy and metallurgical coal markets remains uncertain.
“We remain focused on operating safely, further reducing costs, carefully managing capital spending, improving liquidity and reducing our debt levels as we position the company to benefit when markets recover.”
Walter’s met coal sales, including both hard coking coal and low-volatility pulverized coal injection coal was 2.8 million tons for the quarter, an increase on both the first and last quarter of 2012, with met coal sales tonnage accounting for approximately 88% of total coal sales volume.
HCC sales volume was 2.4Mt in Q1 2013 compared to 1.9Mt in Q1 2012 and 2Mt in Q4 2012.
PCI sales volume was 400,000 tons compared to 500,000t in both prior comparable periods.
Sales prices strengthened compared to Q4 2012 but compared to Q1, prices were significantly lower for both HCC and PCI.
Met coal production was 2.8Mt in Q1 2013, comprising 2.3Mt of HCC and 500,000t of PCI, an increase of 12% from the 2.5Mt produced in Q4 2012.
The company’s thermal coal production accounted for only a tiny margin of the company’s production and sales and decreased slightly further during the quarter.
Walter’s safety record improved from Q1 2012, with its reportable injury rate down 27.3%.
It said it expected sales volumes to remain much the same next quarter but sales prices were expected to increase.
It expects to lower its cost of production and sales by more than 5% next quarter.
Overall earnings, adjusted earnings before interest, tax, depreciation and amortisation and cash flows are expected to significantly improve in Q2 compared to Q1.
Earlier in the week Alabama-based Walter said late preliminary results showed shareholders had voted to re-elect all 10 directors during its annual meeting after it had been locked in a proxy fight with investor Audley Capital for the past few months.
The rejection of all five of Audley’s named replacements brings its bid to take control of Walter’s board to an end – for the time being.
The financial firm reportedly told the Birmingham Business Journal that it might try to step in again if it saw no improvement in Walter’s leadership.
