ICG’s net income was up significantly from 2004 results where it posted a $103.4 million loss. However, the company was only formed in October 2004 when it acquired the principal operations of then-bankrupt Horizon Natural Resources.
Revenue for 2005 was $647.7 million and operating income came in at $56.8 million for the year.
Fourth quarter results were adversely impacted by significant price increases for diesel fuel, blasting agents and other services or commodities dependent on crude oil or natural gas.
The tight labour market in Eastern Kentucky constrained hiring and delayed the production ramp-up schedule at ICG’s Flint Ridge complex. Also, shortfalls in coal deliveries from purchased coal suppliers forced the company to postpone certain shipments.
ICG completed the acquisition of Anker Coal Group and CoalQuest Development during November last year. The company said implementing operational improvements at the former Anker operating companies had taken longer than originally anticipated, delaying the expected increase in coal production and decrease in production costs for the fourth quarter.
The company said recent performance had generally improved, indicating operating issues were being addressed and that 2006 production rates and profit margins should be higher.
“We plan to continue investing in upgrading our equipment and developing our sizeable reserves to fuel internal growth," ICG president Ben Hatfield said.
On its new mine developments ICG has begun construction work at the Beckley underground mine complex in Raleigh County, West Virginia. Originally started by Westmoreland Coal as its Triangle Complex, ICG Beckley intends to complete the unfinished slope and ventilation shaft and construct the necessary ancillary facilities such as a new preparation plant that will allow mining to commence in the Pocahontas No. 3 seam, a high quality, low volatile metallurgical coal, in late 2007.
Design and permitting activities continue on schedule for the Tygart No. 1 Mine, which is to be the first mining complex on CoalQuest Development's Hillman property. A mining permit application for the underground mine and all surface facilities has been submitted to the West Virginia Department of Environmental Protection. Construction of the mine facilities is expected by early 2007.
ICG said it expected to produce 4 million tonnes of coal, with sales of 4.7Mt for the first quarter of 2006.
Forecast earnings for 2006 were $60-80 million, with output projections for 2007 of 22-24Mt.
