For the quarter ended December 31, the company’s revenues totaled $US400.8 million, compared to $236.3 million in the previous corresponding quarter. Operating income was $144.7 million, versus $36.9 million.
That operating income included $5.9 million in costs associated with Walter's impending acquisition of Western Coal, which is expected to close April 1, and $2.3 million in costs at Walter Coke related to long-term environmental monitoring.
For the full year, the company’s revenues were $1.6 billion, an increase of $621 million over 2009.
"We generated strong fourth-quarter earnings on higher coking coal sales volumes and prices," Walter interim chief executive officer Joe Leonard said.
"For the full year, earnings increased by almost 175 per cent over 2009, reflecting strong pricing and production growth from our organic growth initiatives. Globally, events continue to limit availability of premium coking coals and we see supply-demand imbalance continuing in our favor as global steel production improves on its record 2010 output."
He noted that the takeover of Western, a “transformative acquisition”, was coming along nicely.
"The combination increases the size, scale and diversity of our operations, significantly enhancing the company's financial profile and geographic reach, particularly into Asia,” Leonard said.
“We also recently completed the acquisition of a river terminal facility at the Port of Mobile to ensure unconstrained shipping capacity for our long-term coking coal production plans from our mines in Alabama, to maintain low mine-to-vessel costs and to make us less reliant on third parties."
Looking solely at the company’s underground mining segment, fourth-quarter revenues were $350.9 million, versus $179.7 million a year earlier. Operating income was $144.6 million, a three-fold increase over the same period last year.
Coking coal sales were 1.7 million tons in the fourth quarter, a year-on-year increase of 25%, at an average selling price of $196.47 per short ton free-on-board port – a 55.3% jump over average selling prices of $126.48/t in the 2009 December quarter.
Coking coal production came in at 1.5Mt, an increase of about 200,000t. The company cited incremental tonnage increases from the Mine No. 7 East expansion for the rise, as well as improved recovery rates at the No. 4 mine.
“In the fourth quarter 2010, coking coal sales volumes were at the low end of the previously issued expectations range due to a longer-than-expected longwall move in December and difficult mining conditions at both of our underground mines late in the quarter,” Walter noted.
“These conditions continued into January and, along with the impact of planned first-quarter 2011 longwall moves, the company expects first-quarter sales volumes to be in the range of 1.6 to 1.8 million tons.”
Given that loss in production through mid-February, the producer now anticipates its full-year coking coal sales to be 8.5Mt at best, with up to 500,000t from purchased coal opportunities.
