Core Natural Resources Earnings Rise as Coal Margins Widen
Adjusted EBITDA climbed 80% from the prior quarter to $323.6 million.
Core Natural Resources (CNR), the coal producer, reported second-quarter net income of $126.5 million, or $2.51 a diluted share, as lower mining costs widened margins.
The results marked a sharp sequential improvement. Net income had been $21.0 million, or $0.41 a share, in the first quarter, while stronger cash generation accompanied the rebound.
Revenue rose about 5% from the prior quarter to $1.141 billion and increased about 4% from a year earlier. Operating cash flow more than doubled sequentially to $250.4 million, while free cash flow increased to $148.0 million from $55.5 million.
High-C.V. thermal volume rose 9% from the first quarter to 8.4 million tons, returning to its year-earlier level. Realized revenue slipped to $58.11 a ton, but a 9% decline in cash cost lifted the segment's margin to $19.53 a ton from $16.30.
Metallurgical sales increased to 2.6 million tons, including an 8% sequential rise in coking-coal volume. Metallurgical cash cost fell 7% to $85.65 a ton, widening the cash margin to $28.48 from $19.68 in the first quarter and $8.29 a year earlier.
Powder River Basin operations moved in the other direction as volume fell to 10.2 million tons. Lower shipments reduced fixed-cost absorption and higher fuel expenses pushed cash cost up 9%, producing a loss of $0.57 a ton compared with a positive margin of $0.75 in the prior quarter.
Core secured 16 million tons of new sales commitments during the quarter for future delivery at prices expected to produce advantageous margins. The company also recognized the remaining $125.4 million from its Leer South insurance settlement.
Capital returned to shareholders increased to $68 million from $47 million in the first quarter, bringing cumulative distributions under the program to $360.1 million.