The outcome was jolting for the Maryland producer, whose earnings totalled $22 million during the same period last year.
Coal sales revenue was up slightly to $360 million, a $600,000 gain period-for-period over 2006. Additionally, its operational cash flows reached a quarterly record of $83.7 million.
“Foundation's solid second-quarter operating performance was negatively impacted by the effects related to the idling of our Wabash mine and the value of lost production resulting from the nine-day strike that occurred at our union mines,” said company chairman James Roberts.
“In addition, new MSHA rulings relating to mine seals and operating conditions that delayed the restarting of our Cumberland mine for six days adversely affected second-quarter performance.”
However, Roberts noted the status of the charges as “one-time items” as well as the positives of its operations’ overall performance.
“Shipments totalled 18.3 million tons, and $83.7 million of cash was provided by operations,” he said.
“In addition, realisations at all business units increased over the comparable quarter of the prior year.
“Due to our favourable contract position at the beginning of 2007, our operations are largely unaffected by current soft market conditions. All mines are running at planned production levels and we expect this will continue for the remainder of 2007 based on our fully committed contract position for 2007.”
Officials for Foundation also discussed the recognition of its Cumberland complex earlier this year at the Longwall USA 2007 event, having earned the Top Performer Award a second time for its “outstanding operational, safety and reclamation performance” during the year.
“Cumberland achieved record production of 7.9Mt and 8.3Mt of raw coal in 2005 and 2006, respectively, while posting an average MSHA lost time incidence rate of 3.5 for both years,” the company said.
Foundation provided operational updates, including the status of its final closure of Wabash, which continued to have equipment removed during the period. Because the company opted to delay the slope and shaft’s sealing in order to take out additional units, it has made available for resale more than $9 million in equipment and began sealing work in July.
Regarding its Belle Ayr complex, where it is installing a belt conveyor, Foundation noted the system is expected to begin operation next quarter.
“The conveyor will enable Belle Ayr to increase production by 5Mt per year and it will reduce diesel, tyre and other truck operating costs for the mine,” the company said.
At its Appalachian Emerald mine, installation of a second longwall is “on schedule” and is due for completion during the final quarter of the year.
“This will provide the opportunity for increased production at Emerald by eliminating down time during longwall moves and providing backup tonnage if adverse geological conditions are encountered,” Foundation said.
Looking forward, the operator said it anticipates earnings for 2007 to total $42–70 million on revenue of $1.5–1.6 billion, with no associated Wabash charges.
