Arch Coal, Inc. today reported net income of $60.0 million in the first quarter of 2018, compared with net income of $51.7 million in the prior-year period. Revenues totaled $575.3 million for the three months ended March 31, 2018.
"During the quarter, our global coking coal sales strategy, better-than-expected operating performance at the Leer mine and solid support from our cash-generating thermal franchise allowed Arch to overcome weather-related logistical complications and higher costs in the Metallurgical segment," said Paul A. Lang, Arch's president and chief operating officer. "Going forward, we will continue to focus on controlling and lowering costs and managing the quarterly volume volatility that comes with a more significant global customer base."
First quarter 2018 coking coal shipments include 0.2 million tons to North American customers, the vast majority of which is carryover, at $91.74 per ton and approximately 1.3 million tons to seaborne customers at $139.79 per ton.
Coking coal sales volumes were flat when compared with the fourth quarter of 2017. Shipment levels were less than ratable due to weather and supply-chain disruptions in the early part of the quarter and, more recently, to widespread loading delays at export facilities on the East Coast. Arch estimates that 0.1 million tons of coking coal slipped into the second quarter. Metallurgical coal margins per ton expanded significantly, reaching $47.64 per ton during the quarter and representing a more than 50 percent increase over the prior-quarter period.
In a press release, the company said global steel production remains a key support for global coking coal markets, with steel output up more than 4 percent year-to-date and steel prices still at very robust levels in Arch's core Atlantic Basin steel markets.
For an outlook on 2018, Arch said it anticipates projected coking coal sales of between 6.3 million and 6.7 million tons. Included in this range are 0.2 million tons of previously announced carryover volume. The vast majority of the carryover tons were shipped during the first quarter, effectively completing the 2017 lower fixed-priced commitments.