The leader of Alpha Natural Resources is warning of more layoffs after the company’s first quarter revenues were lower than expected.
“As we have been for some time, we’re taking action to control cost everywhere and reduce cost where we can,” Alpha Chairman and CEO Kevin Crutchfield said in comments after the company released its first quarter report April 30. “We idled additional mines during the quarter as a result of the weak domestic and export thermal markets and we expect to take further action with respect to overhead costs and we’ll likely adjust our thermal production base further in light of expected market reality.”
The Kingsport Times- News reports that Alpha’s total revenues in this year’s first quarter were $0.8 billion compared with $1.1 billion in the first quarter of 2014, and coal revenues were $0.7 billion, down from $1.0 billion a year ago.
“While there are some encouraging signs coming out of Europe, the met coal market globally remains challenged, as global steel capacity utilization declined during the first quarter,” Crutchfield said. “The story on thermal coal remains difficult as well, with slowing demand and more than ample supply continuing to pressure prices, both domestically and internationally.”
According to Crutchfied, the company’s “adjusted Eastern cost per ton was $65.35 in the quarter, compared to roughly $62.55 last quarter.”
“Coal revenues were $726 million, down from $932 million in the fourth quarter,” Crutchfield added. “The decreases in total revenues and coal revenues were primarily attributable to lower shipment volumes, difficult weather and weaker met pricing.”
Crutchfield said that Alpha, which has operations in Letcher County, “continued to actively manage its mine portfolio and balance sheet … to mitigate the negative impacts of these market conditions on our business, focusing our efforts on reducing costs, maximizing efficiency, managing our balance sheet and staying laser focused on liquidity. “
He said Alpha’s liquidity position remains at approximately $1.9 billion.
“That said, we had a very difficult quarter, to say the least.”