The Virginia-based coal producer said excluding the charge it would have made a net income of $92.2 million, which is a jump from the $34.9 million made in the same period last year.

Despite the disappointing cash flow Massey reported a year-on-year increase of 38% in second-quarter coal revenue and an 8% increase in coal tons sold.

Coal revenue for the quarter was a record $710.3 million compared to $516.2 million in the second quarter of 2007.

Massey chairman and chief executive Don Blankenship said he was pleased with the company’s operating results.

“Produced coal revenue and average revenue per ton reached new records and excluding the Wheeling-Pitt charge, we also set new records for operating cash margin per ton,” Blankenship said.

“We continued to make good progress with our expansion plans during the quarter and most of our projects are on or ahead of schedule.”

Massey’s expansion plans include the completion of the Norfolk Southern rail siding, two new mines and the completion of nine miles of raw coal transportation beltline at the Mammoth Energy resource group.

A further expansion was a new slope at the Pond Creek seam which was completed by Massey’s Process Energy subsidiary.

During the quarter Massey announced plans to build three to six new preparation plants and shipping load-outs over the next two years.

One preparation plant is already under construction at Massey’s Inman Coal Resource Group in Boone County, West Virginia, and is expected to be completed this year.

Construction is expected to begin soon on another new preparation plant at the Coalgood Energy resource group in Kentucky. The location of the remaining plants has not been disclosed.

Massey expects its new plants to reduce processing costs, increase processing capacity and reduce freight costs for its customers.

Prices for Eastern US steam coal increased during the second quarter driven by strong demand from the export market.

Massey predicted high coal prices and strong demand would continue due to expansion of the world’s developing nations.

It projected its 2008 coal shipments would be 41.5–43 million tons, with an average coal realisation of $65–66 per ton.

Massey plans continued coal shipment growth, reaching 46–48Mt, including around 13Mt of coking coal, in 2009 at an average price of $84–92/t.

Massey expects to ship 50Mt in 2010, including 15Mt of coking coal.