Rising world steel production coupled with the continuing importance of coal as a cornerstone fuel for electricity generation in the United States, are behind the more positive outlook of American coal miner CONSOL Energy.
CONSOL, the largest exporter of U.S. coal and the largest U.S. producer of coal from underground mines, has reported earnings of $US31.9 million for the quarter ended March 2000, compared with net income of $US25.6 million for the same period last year.
One of the reasons for the higher net income for the quarter was lower mining costs, achieved through lower total production, improved productivity and the closing of the Keystone and Helvetia complexes.
The average production cost per ton on all tons produced was $US19.19 in the just-ended quarter versus $US21.56 per ton in the comparable period a year ago. Productivity was up sharply, due in part to the closing of the Keystone and Helvetia complexes. Average mine productivity per man-day was 46.3 tons, compared to 39.5 tons in the year-ago quarter. Bailey and McElroy mines set monthly production records during the quarter.
"CONSOL Energy's fundamentals have continued to strengthen during a slow period for the coal industry," said J. Brett Harvey, president and chief executive officer. "Healthy demand for our high-Btu Pittsburgh 8 seam coal, our aggressive participation in an improving export market, and our ability to maintain margins despite a decline in average realized price per ton of coal made the difference this quarter."
The company has also just completed a "voluntary separation" program which reduced net income by $US9.0 million and will reduce administrative employees by 127.
Total coal sales for the quarter were 19.4 million tons compared with coal sales in the previous period of 19.5 million tons. Coal production was 19.0 million for the quarter compared with 21.0 million in the comparable quarter a year ago. The company is forecasting sales of 19.5 million tons for the final quarter of its fiscal year.
"Our order books look good, particularly for many of our high-Btu Pittsburgh 8 Seam mines," said Michael F. Nemser, senior vice-president and chief financial officer. "There is still some weakness in demand for Central Appalachian coal, but that could turn around if the summer proves to be hotter than normal."
The company has annual revenues in excess of $2 billion and 22 bituminous coal mining complexes in six states and a Canadian province.
