For the period ended September 30, the Pennsylvania company reported net income of $US167.3 million, versus $75.4 million a year ago.
The record revenue was $1.52 billion, up from $1.35 billion. Most of that increase stemmed from much higher average realized prices from low-vol coal sales.
Consol also pointed to a large rise in profit margins on coal to just over $20/t, a rise of $6.55 per ton from the year-earlier quarter.
“We met our expectations on coal production,” chairman and chief executive officer Brett Harvey said, adding that its sales team raised the export outlook to between 10 and 10.5 million tons in 2011.
Also, Consol said, for the second consecutive quarter its coal division generated more cash from its met business than from its thermal business.
“This demonstrates our significant presence in the growing metallurgical markets,” he said.
Production in the third quarter was 1.4Mt of low-vol, 1Mt of high-vol, and 12.3Mt of thermal, for a total of 14.7Mt. Of the thermal production, 11.1mt originated in northern Appalachia and 1.2Mt came from central Appalachia.
Looking ahead, the producer said that high demand continues for its low-vol product, and supply is still constrained by global weather and labor issues.
For the coming year, it has already sold 900,000t of Buchanan coal at $213 per short ton, FOB mine, not counting legacy contracts for 221,000t.
“High-vol continues to benefit from increased market penetration into Asia as well as sales into new markets for testing purposes,” officials said.
“As a result of a prior test, Consol has signed a new sales order with a US customer for 700,000t in 2012, at prices within expectations. Two additional tests with European steelmakers continues.”
High-vol demand, the company confirmed, will hinge upon increasing market penetration. Currently, Consol has 3.7Mt unpriced for next year.
In US thermal, the company’s output continues to be sold out for this year. Looking at 2012, the producer during the third quarter priced 17Mt of thermal coal for 2012 at an average price of $64.10, which raised its average realized price for next year to $62.37/t.
“Consol is already approximately 84 per cent sold out of this category for 2012,” the company confirmed.
“If tightening regulations are deferred allowing older coal fired plants to continue running, generators may be in need of additional coal supplies. Current customer inventories in our sales area are very low.”
Finally, the company said that European export thermal demand is still rising, with an additional 250,000t sold in the quarter for deliveries in 2012 to European utility customers at prices that are higher than thermal sales domestically and almost equal to its high-vol sales. It is projecting 2011 export thermal sales to be 2.1 to 2.3Mt.
In an analysts’ conference, sales and marketing vice president Bob Pusateri said that Consol is focused on exporting more coal to Asian markets, especially China, for its steelmaking market.
“If the Chinese economy is slowing down with respect to its appetite for US coals, no one has told the Chinese," he told Reuters.
“They are very active in the marketplace with us and we are looking forward to a very robust year in 2012.”
He also said that, with the company projected to export between 10 and 15Mt this year, about 3.5Mt of that – high-volatility metallurgical coal – is destined for China.
Harvey called China ”a very mature growing market”
“The volumes are big, the customers are big, things are happening over there and we really see where our products can go over there into that volume,” he said.
“Clearly we are bullish on the international markets because that is a growing market. The world is, for lack of a better term, starved for BTU's and coal and they are going to use it.”
