Central European hard coal and coke producer New World Resources (NWR) reported coal production of 8.6 million mt in the nine months ended September 30, on par with the previous year, although external sales amounted to 7.2 million mt, a 10% drop from 2011, it said Wednesday.
External coal sales consisted of 3.8 million mt of coking coal (47% mid-volatility hard coking coal, 46% semi-soft coking coal and 7% PCI), climbing 8% year on year, and 3.4 million mt of thermal coal, a 25% decrease from the same period in 2011.
The miner reported an end-of-period inventory of 1.3 million mt, almost tripling from the 457,000 mt reported at the end of the same period in 2011.
NWR also reported coal segment revenues of Eur916 million ($1.2 billion), slipping 20% year on year, due to retreating coking coal prices and lower thermal coal volumes.
The average realized price for coking coal for the nine-month period was reported at Eur131/mt, a 28% fall, although thermal coal prices, at Eur73/mt, were 12% higher than in 2011.
"Trading conditions remained challenging in the third quarter. In an environment where coking coal prices are 30% down year-on-year, our focus will remain on cost containment and watchful management of capital spending in order to ensure we are well positioned for the future," NWR executive director and CFO Marek Jelinek said in the results.
He said weakness in the steel industry is having a knock-on effect on raw materials such as coking coal, which was reflected in its pricing for the fourth quarter. At Eur102/mt, prices are down 20% from the previous quarter.
FULL-YEAR PRODUCTION SEEN AROUND 11 MILLION MT
NWR said it expects coal production of between 11 million mt and 11.1 million mt for the 2012 financial year, slightly down from the 11.2 million mt produced in 2011. Year-end coal inventories are expected at 600,000-700,000 mt.
It added that external sales for the year are expected to be between 10.2 million mt and 10.3 million mt of coal, also falling from 10.6 million mt sold last year. It said the split should be about 50% coking coal and 50% thermal coal.
Jelinek said that, looking ahead, despite some positive signs, the miner expects the situation in Europe to remain volatile in 2013 and is therefore preparing more efficiency measures at its current operations.
"Although economic growth in key emerging markets such as China or India has moderated, they remain robust as these countries progress with continuing investment in urbanization, which underpins an improving sentiment towards raw materials for steel production in general," he said.
Meanwhile, the producer's coke production amounted to 525,000 mt in the nine-month period, a 10% drop, with external sales at 432,000 mt, stable year on year.
As a whole, the producer reported consolidated revenues of Eur1 billion from January to September, down 18% from the same period last year, primarily due to lower coking coal prices, EBITDA of Eur227 million, falling 39% and profit of Eur47 million, dropping 61% year on year.
