For the June period, the Pennsylvania-based company reported revenues of $US1.45 billion, an 8.4% reduction over the $1.59 billion it posted during the same period of 2011.
At the same time, it posted $152.7 million profit, a sizeable year-on-year jump of more than $77.4 million.
Consol said the figures included gains from a non-core property sale as well as a charge for its reclamation of the Fola complex in Appalachia.
Costs also are continuing to fall for the company. Second quarter fully-load costs totaled $52.23 per ton.
While the per-ton rate was higher than last year’s second quarter, it was $2.17/t lower than the first quarter’s $54.40 per ton.
The cost reduction takes on a greater scope considering Consol produced 15.7 million tons in the first quarter and 14.6Mt in the period just ended. It is usually difficult to make savings when production levels are reduced.
Consol’s average realized per-ton price was $66.00 in the June quarter, down 12% year-on-year from $74.63. Officials said the decrease stemmed from lower pricing for both low-vol and high-vol coal.
The realized price for thermal coal increased slightly from the year earlier quarter during the same timeframe.
The company’s production consisted of 1.1Mt low-vol, 1.2Mt high-vol and 12.2Mt thermal for a total of 14.6Mt. On the thermal side, 11Mt originated in northern Appalachia and 1.2Mt came from central Appalachia.
Thermal coal inventories increased in the June period by 100,000t versus the first quarter of the year.
“We continue to manage our way through this challenging environment,” Consol chairman and chief executive J Brett Harvey said.
“In fact, we are fortunate to have generated more net income in this year’s second quarter than in last year's second quarter, despite the much weaker industry and macro environment. We've been working aggressively to manage costs and to raise cash by selling assets that are better suited to others.”
Harvey noted the common perspective that the coal industry continued to face strong headwinds, and said the company’s focus through this time had been investments in its core businesses in coal and natural gas – something it would continue to do.
“Consol's portfolio of coal and gas assets is unique,” he said.
“No other company has tier-one low-vol coal, thermal coal, high-vol coal, gas, and land assets under one roof.”
The producer said in mid-July that, as it moved into the third quarter, projected production for the period was expected to range between 14 to 14.5Mt, including 1.1Mt at the Buchanan mine in Virginia.
It also will keep in place its previously-confirmed adjusted schedules at the Blacksville No. 2 and Robinson Run mines. These will increase normal vacation schedules by a combined three weeks during the quarter.
Surface operations at the Fola complex were the latest to be idled by Consol, and officials said underground mining would follow late next month.
Looking ahead, the company said unpriced low-vol tonnage shipped in the third quarter would receive a similar price to the second quarter.
Softness in the Asian metallurgical markets in the June period had its own impact on high-vol tonnage, including the realized coal price for the sector.
Consol’s high-vol output was successfully tried by a European steel mill, though officials said the customer was not expected to take shipments until the demand for steel increased because of a general coking coal oversupply.
As a result, the company trimmed the outlook for high-vol sales for the year’s second half.
In thermal, the producer has benefited from the weak market and has almost all of its coal sold for the year.
“Customer requests for deferrals have largely subsided during hot summer weather,” officials said.
“Utility stockpiles, while receding, remain at higher-than-normal levels. Because of the lack of clarity for 2013, discussions for new thermal sales are in a very early stage.”
Globally, Consol expects it will continue to sell thermal coal into European markets under contract as well as on a spot basis to Asia through the rest of 2012.
