Arch's cash margin per tonne declined to $2.97/t from $12.82/t in the first quarter for its Appalachian mines.
On a consolidated basis, Arch earned $2.82/t in cash margin during the second quarter of 2015 compared with $3.75/t in the first quarter of 2015, reflecting the impact of lower volumes in the company's Powder River Basin segment and the two longwall moves in its Appalachian segment.
Average selling price per tonne increased slightly due to an increase in the percentage of metallurgical tonnes in the regional sales mix.
“The expected increase in cash cost per tonne reflects the lower output at the two low-cost longwall operations due to the second quarter longwall moves and the start of the annual miners’ vacation period,” the company said.
Arch’s revenues totalled $644 million in the quarter, and adjusted earnings before interest, taxes, depreciation, depletion and amortisation (EBITDA) was $45 million.
Arch chairman and CEO John Eaves said: “Arch continues to weather the significant market challenges facing the industry.
“Even with the lowest shipment level experienced by Arch in more than five years and shipping challenges in the Powder River Basin, our operations continued to do an outstanding job of managing costs in this environment. In fact, all of our operating regions were cash flow positive during the first half of this year, a position we think sets us apart from our competitors.
“Our repositioned portfolio of large-scale, low-cost thermal operations in the PRB and highly competitive metallurgical coal operations in Appalachia is designed to help allow us to continue to navigate this challenging market environment.”
Given challenging market conditions, Arch has lowered the high end of its thermal guidance and now expects thermal sales volumes for 2015 to be in the range of 120Mt to 124Mt. In addition, Arch has again lowered its capex guidance.
“We continue to take proactive steps to prudently manage through these tough times, with the goal of emerging a stronger company as markets recover,” Eaves said. “Our cash-positive operating profile, relentless focus on cost control and capex management should enable us to continue to weather the ongoing challenges.”
