Total costs and expenses during the first quarter of 2015 were $1.1 billion, compared with $1.3 billion in the first quarter of 2014 and $1.2 billion in the prior quarter. Cost of coal sales was $0.8 billion, compared with $0.9 billion in the year-ago period and $0.8 billion in the prior quarter.
The cost of coal sales in the East of the US during the first quarter of 2015 averaged $66.45 per tonne, compared with $65.76 in the first quarter last year and $55.55 in the prior quarter.
Excluding $1.10 per tonne in merger-related expenses, the adjusted cost of coal sales in the East averaged $65.35 per tonne, compared with $65.73 in the first quarter last year, which excluded $0.03 per tonne merger-related expenses, and $57.55 in the fourth quarter of 2014, which excluded a $2.71 per tonne benefit from immaterial corrections of prior period asset retirement obligations, $0.63 per tonne merger-related expenses and $0.08 per tonne employee benefit related expenses.
Fourth quarter 2014 Eastern adjusted cost of coal sales per tonne benefited about $5/t from gains on asset disposals and a net benefit from various liability adjustments.
The cost of coal sales per tonne for Alpha Coal West's PRB mines was $10.38 during the first quarter of 2015, compared with $10.23 in the first quarter of 2014 and $11.16 in the prior quarter.
Alpha chairman and CEO Kevin Crutchfield said: “As all participants in the industry are acutely aware, we are more than two years into a prolonged coal market downturn.
“In order to mitigate the negative impacts of these market conditions on our business, we continue to take proactive steps to reduce costs, maximise efficiency and manage our balance sheet.
“In the first quarter we idled additional mines to further adjust our cost structure, and we expect to take further actions to optimise our mine portfolio and reduce overhead costs in order to achieve, and potentially exceed, our target of annualised savings in the $60-75 million range when these actions are fully implemented.
“These idlings, as well as weaker overall met pricing, longwall panel development work at Emerald, and difficult weather, all contributed to a loss this past quarter on an Adjusted EBITDA basis.”
Total revenues in the first quarter of 2015 were $0.8 billion compared with $1.1 billion in the first quarter of 2014, and coal revenues were $0.7 billion, down from $1.0 billion in the year-ago period.
The decrease in coal revenues was attributable to lower average realisations in all regions and fewer tonnes sold in the East of the US, mainly due to weather, resulting in reduced shipments and coal revenue by about one million tonnes and more than $50 million, respectively.
Freight and handling revenues and other revenues were $100 million and $16 million, respectively, during the first quarter of 2015, versus $134 million and $25 million, respectively, in the first quarter of 2014.
