Arch Coal this week announced it held income available to common shareholders of $22.1 million, or $.40 per fully diluted share, for the fourth quarter ended December 31, 2003. Revenues for the quarter from coal sales reached $374.9 million from 27 million tons of coal.
Figures were up from the 2002 fourth quarter, which registered a pitiful net income of US$1.1 million, or US$.02 per diluted share.
Arch now hold a strong position in sale commitments, signing contracts in a rising coal market environment for much of its previously unsold tonnage for 2004, as well as committing nearly 20 million tons for delivery in 2005 and 2006.
At present, Arch has priced approximately 65% of its expected 2005 production and 50% of its expected 2006 production. Arch has also signed contracts for approximately 700,000 tons of metallurgical coal to be delivered during 2004 and 2005.
"We are pleased with our recent contract activity, and we regard our sizable open positions in 2005 and 2006 as highly advantageous given our expectations for U.S. coal demand and pricing in the near to intermediate term," said Arch CEO Steven Leer.
Arch also managed to reduce the average mining cost per ton during the quarter, although eastern costs were up modestly compared to the previous quarter due to a 5% reduction in produced volumes in that region related to routine variations in mining rates at several operations.
In its quarterly statement Arch held a positive outlook, basing its predictions on the strengthening coal market and low stockpiles, which declined to approximately 123 million tons at the end of December, 16% lower than last year.
According to Coal Daily's most recently published pricing indices, the current spot price for eastern coal is approximately 40% higher than at the same time last year and spot prices for Powder River Basin coal have increased approximately 10% over the same time period.
"The outlook for U.S. coal markets is strong," Leer said. "We believe there is great potential for increased profitability in the future, driven in large part by the ongoing expiration of older, lower-priced contracts."
