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UPDATE 1-Alpha Natural posts smaller loss, cuts capital budget
February 12, 2015 / 1:26 PM / 3 years ago

UPDATE 1-Alpha Natural posts smaller loss, cuts capital budget

(Adds forecast, details)

Feb 12 (Reuters) - U.S. coal miner Alpha Natural Resources Inc cut its 2015 budget after tight cost controls helped the company report a much smaller-than-expected fourth-quarter loss.

Alpha Natural and rivals such as Peabody Energy Corp and Arch Coal Inc are reining in expenses to make up for coal prices that have remained low for at least two years.

The company cut its 2015 capex outlook to $225-$275 million from $275-$350 million.

Alpha Natural last month idled some of its mines in West Virginia, which produced 1.5 million tons of thermal coal in 2014, citing weak demand and depressed prices.

Weak demand from Europe and Asia, especially China, has weighed on metallurgical coal prices, while prices for power-generating thermal coal have been depressed as utilities switch to abundantly available natural gas, a cheaper alternative.

Peabody Energy slashed its quarterly dividend last month and Arch Coal suspended its dividend this month.

Adjusted cost of sales for Alpha Natural’s eastern mines, spanning the Appalachian region in Pennsylvania, West Virginia and Kentucky, fell to $57.55 per ton from $66.97 a year earlier.

Total costs in the quarter fell 9 percent to $1.17 billion.

The company’s net loss narrowed to $121.7 million, or 55 cents per share, in the quarter ended Dec. 31 from $358.8 million, or $1.62 per share, a year earlier.

Excluding items, the loss was 50 cents per share. Analysts on average were expecting a loss of 71 cents, according to Thomson Reuters I/B/E/S.

Revenue fell 2.1 percent to $1.07 billion, better than the average estimate of $985.4 million.

Up to Wednesday’s close, Alpha Natural had lost more than 77 percent of its market value in the last 12 months, while the broader Dow Jones U.S. Coal Index fell 32 percent. (Reporting by Anannya Pramanick in Bengaluru; Editing by Savio D‘Souza and Don Sebastian)

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