Production in Central Appalachia increased 13% while the average sales price for the basin’s coal increased by 11% from the first quarter 2005.
On top of this, the company’s Illinois Basin reserves will double in a year with the expected completion of two acquisitions in the 2006 second quarter.
“This was an excellent quarter, [as] we had our highest EBITDA since we became public. Production was higher. Shipments were higher. Prices were higher. Railroad service was good. The labour situation continues to be tight, but manageable. Finally, we completed several of our major growth projects during the quarter," James River chief Peter T Socha said.
EBITDA of $US21.4 million for the first quarter increased by 78% from last year, with the company recording a $1.4 million net income for the period. Net income included a deferred income tax benefit of approximately $1.3 million.
Like the rest of the industry, James River continued to feel cost pressures associated with raw materials and purchased services, labour productivity, and the start-up cost of its growth projects.
The company’s Mine 15 growth project at McCoy Elkhorn started producing coal in September 2005. Two crews of miners and equipment completed bottom development work in February 2006 and the second section of miners and equipment are expected to begin production in this month. The third section of miners and equipment are expected to begin production in the fourth quarter of 2006.
At the end of the first quarter, James River said it controlled about 242.1 million tonnes of proven and probable coal reserves in Central Appalachia and approximately 24.2Mt in the Midwest.
