For the period ended March 31 the Pennsylvania producer reported net income of $US192.1 million versus $110.2 million during the same period last year.
The company's coal division drove the 92% percent increase in net income in the quarter, posting record coal revenues of $1.13 billion.
Coal sales were higher than expected at 16.7 million tons. Paired with higher coal prices it helped Consol realize a record $1.4 billion in total revenue for the company – $1.24 billion was reported during the similar quarter in 2010.
First-quarter average realized prices also increased, by about $10 per ton, as costs increased about $2 per ton versus the prior year quarter.
“Consol Energy had a superb quarter by nearly any measure,” chairman and chief executive officer Brett Harvey said.
“We…exceeded our expectations on coal production. Our sales team sold a record 1.1Mt of Bailey coal into the high-vol coking coal market [and] we also locked in additional low-vol Buchanan tonnage at an annual equivalent price of $290 per (metric) tonne, free on board and trimmed."
Consol officials noted recent international developments as well as ongoing growth of its coal export arm had led it to the decision to expand capacity at its Baltimore Terminal by 2Mt to 16Mt per year.
Included in the enhancements are about $10 million in upgrades to rail infrastructure. The additional capacity should be ready for use during next year’s third quarter. Also, engineering studies are under way to determine the feasibility of extending the terminal beyond the 16Mtpa capacity.
The producer said it was eyeing early 2012 for the reopening of its Amonate Complex in Virginia. The mine, with 240Mt of metallurgical reserves, was among three parcels for which the company had previously entertained offers.
“With the rapidly improving market for the met coal produced by Amonate, and with the industry's M&A activity creating some distraction for potential buyers, we now believe that a reopening of the mine will yield the best value for our shareholders,” the company said, noting that the rehabilitation should cost less than $100 million in capital expenditures.
“We expect to produce approximately 400,000 tons in 2012 [and] two additional continuous miners could be added towards the end of 2012. Production could ramp to 800,000 tons by 2015.”
Looking ahead, Consol reiterated its upped guidance released earlier this month that indicated 2011 coal production will now be 60-62Mt versus 59-61Mt. Guidance for 2012 and 2013 are also being adjusted positively by 500,000 tons to reflect the start-up of production at Amonate.
