The company, which reported December quarterly revenues of $US745.2 million and EBITDA of $115.7 million, is looking to further decrease costs in 2015, Arch CEO John Eaves said.
“During the fourth quarter of 2014, improving operational results and steady shipment levels offset the softening pricing environment, allowing Arch to deliver its highest quarterly EBITDA in over a year,” he said.
“Our strong cost performance in the Appalachian segment, underscored by an outstanding operational quarter at our Leer mine, demonstrates that our strategy to control costs, preserve liquidity and reduce capital outlays is effectively mitigating some of the industry-wide headwinds.
“In 2014, we made significant progress optimising the company's cost structure and asset portfolio while maintaining our focus on employee safety and environmental stewardship.
“The successful ramp-up of our low-cost Leer mine, coupled with the impact of our Cumberland River complex coming offline, transformed our Appalachian metallurgical coal platform and significantly reduced our cost structure in the region.
“With our enhanced met platform and strong Powder River Basin franchise, we are confident that our diverse and balanced tier-one asset portfolio is well positioned for long-term value.”
Consolidated sales price per tonne decreased slightly over the quarter, but was more than offset by a $0.72 decrease in consolidated cash cost per tonne, reflecting lower cash costs in the Appalachian and Powder River Basin segments.
In Appalachia, Arch earned a cash margin of $9.90/t in the fourth quarter of 2014 compared to $2.35/t in the third quarter.
Sales price per tonne increased modestly over the same time period, due to a higher percentage of metallurgical coal in the regional volume mix.
Cash costs per tonne in the fourth quarter decreased by $7, attributable to cost containment efforts, a strong performance at the Leer mine and improvements at the Mountain Laurel mine.
For full year 2014, Arch earned a cash margin of $5.38/t in Appalachia compared with $6.07/t in 2013.
Annual sales price per tonne declined 6% versus the prior year, reflecting softer pricing on metallurgical and thermal tonnes. Cash costs in 2014 decreased by $3.61/t versus 2013.
In the Powder River Basin, fourth quarter 2014 cash margin per tonne declined 3% compared to the third quarter, attributable to lower realized prices per tonne. Cash cost per tonne declined slightly over the same time period, due to lower consumable costs.
For full year 2014, Arch earned a cash margin of $1.80/t in the Powder River Basin. Annual sales price per tonne increased 3% versus the prior year, reflecting higher pricing on contracted tonnes. 2014 cash cost per tonne increased 4% over the same time period, due to higher sales-sensitive costs and increased repair and maintenance costs.
For full year 2014, Arch earned a consolidated cash margin of $2.72/t versus $2.82/t in the prior year, due in part to lower earned margins in the company's Bituminous Thermal segment and lower pricing on metallurgical and export tonnes. Consolidated sales price per tonne declined modestly, while consolidated cash cost per tonne was flat over the same time period.
