The positive result was based on coal sales of 9.4 million tons that generated revenues of $603.2 million for the period ended June 30. This is versus last year’s second-quarter net loss of $93.3 million on revenue of $710.3 million.

For Massey’s first half, produced coal revenue totalled $1.28 billion while its recorded net income was $63.6 million. In 2008’s first half, coal revenue totalled $1.25 billion but the producer suffered a total net loss of $51.4 million.

While the company realised record-high operating cash margins per tons of coal in the second quarter of last year, it was not so lucky this year – at $10.48 compared to $15.94, a drop steered by reduced shipped coal price averages and increases in cash per ton.

"We are extremely pleased to be generating strong cash flow for our shareholders in a very difficult market,” Massey chairman and chief executive Don Blankenship said.

“We have had to make tough decisions to control costs and adapt our operating plans as coal demand remains weak but our operations have performed well."

Blankenship also noted that Massey’s market share in the first half of the year had increased.

"Our coal tons shipped to utilities increased 8 per cent compared to the first half of 2008, while it is estimated that total shipments of Central Appalachia coal to utilities declined by 7 per cent in the same period."

A hot topic for Massey is the adjustments it has made to staffing, production and other factors as part of cost-cutting measures across the company, and those efforts continued in the June quarter.

Overtime was limited, supply contracts were renegotiated and some employees had their wages and benefits reduced, while the company also moved to idle its higher-cost mines. The company has cut about 700 employees from its workforce since January.

All of these changes, and the resulting savings, have significantly offset the rise in average costs per ton due to lower sales volumes and production.

“Massey expects to benefit from meaningful productivity increases as its new mines and workforces mature and total turnover declines,” the company noted.

Despite changes to its workforce numbers and alterations to production plans, the company said it was on the road to another record year for safety. Its non-fatal days lost rate in the first half of the year was 1.72, lower already than its full-year 2008 rate of 1.93.

Last year, the national average NFDL rate in bituminous coal was 2.95.

“Massey is currently making the investments to comply with requirements for reinforced seals, underground shelters and miner communication and tracking devices,” Blankenship said.

“Capital spending on these initiatives totalled more than $8 million in the first half of the year and is expected be more than $30 million for the full year. Massey is concerned that some regulatory requirements are ineffective and may divert capital from more effective programs or initiatives … [but] remains committed to working with regulators to identify and develop the most effective safety programs possible.”

On the heels of its safety success comes the company’s new Hazard Elimination Program, an initiative Massey will put into place in conjunction with federal and state agencies.

Designed to reinforce Massey workers’ abilities to identify and rectify potential issues which could be violations of state or federal regulations, the program will also educate staff on recent changes to the law. The program will officially rollout company-wide on August 1.

"We are very excited about this new safety program," senior vice-president and chief operating officer Chris Adkins said.

"We are confident that it will be very effective and enable us to take our safety performance to a new level."

For 2009, the company said it has tightened its guidance, and now expects 38.5-40.5Mt in shipments at an average produced realisation of $61.50-63.50/t. Massey’s average cost per ton for the full year is anticipated to be $51.50-53, while other income is expected to equal $75-100 million.

Looking ahead to 2010, the producer said coal shipments could total 37-42Mt at an average price of $60-65/t. Cash costs for the year are budgeted at $48-52/t, according to guidance, while expectations for capital expenditure will remain at $100-200 million.