Arch Coal, Inc. today reported net income of $81.3 million in the fourth quarter of 2017, compared with net income of $33.4 million in the prior-year period. Fourth quarter revenues reached $560.2 million on 23.5 million tons of coal sales.
For the first full year since its public relisting, Arch reported net income of $238.5 million in 2017. Annual revenues topped $2.3 billion based on strong coking and international thermal coal markets, the company said in a press release.
In the Metallurgical segment, coking coal volumes declined 17 percent when compared with the third quarter due to severe weather in the country's eastern half during December that affected rail service as well as unloading operations at East Coast export facilities. Despite this short-term interruption in the Metallurgical segment, Arch's fourth quarter cash margin per ton expanded 30 percent to $31.32 compared to $24.14 for the prior-quarter period.
Average coking coal realizations were lifted by stronger pricing on index-linked tons that priced during the period. Fourth quarter segment cash cost per ton sold declined 8 percent when compared to the third quarter of 2017, driven primarily by normalized mining operations at the company's two longwall mines and good cost control at the other two operations in the segment.
Overall, Arch believes the global metallurgical market is in healthy balance. As seen repeatedly in recent months, even small supply disruptions or demand bumps continue to translate into significant price moves. Most recently, logistical challenges in Australia, continued supply pressures in China and buoyant steel markets have acted to support metallurgical pricing.
Looking ahead, Arch expects metallurgical markets to remain in relative equilibrium throughout 2018.