Kentucky’s Lipari Energy reports lower Q3 coal sales

During the third quarter of 2012, Lipari Energy‘s (TSX: LIP) operations sold 311,506 tons of high quality thermal coal, a 6.5% decrease over the prior year’s quarter of 333,256 tons.

The average realized sales price per ton of coal sold in the third quarter was $74.04 per ton, a 6% increase over the prior year’s average realized price of $69.83 per ton. Overall demand for coal continues to be reduced by lower natural gas prices and a slower economy, Lipari noted in a Nov. 14 earnings statement. Lipari’s stock is listed in Canada and it has coal mining operations in eastern Kentucky.

Lipari said it has sales commitments in place for 100% of its planned 2012 production and approximately 90% of its planned 2013 production at prices averaging about $72 per ton in 2012 and $77 per ton in 2013. The company currently plans to keep production at levels to meet contracted tonnages.

Third quarter 2012 tons sold decreased by 6.5% and production decreased by 22% over third quarter 2011 to 311,506 tons and 231,902 respectively. Third quarter revenues decreased by 0.9% as a result of the decrease in tonnage sold. Lipari generated earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $3.7m during the third quarter of 2012. Adjusted EBITDA, after accounting for a change in the fair value of warrants, lease expenses and other adjustments, was $4.7m during the third quarter of 2012.

“We are cautious yet optimistic about our third quarter results, as our tons sold increased by 25% and our EBITDA increased by $1.6 million over the second quarter of 2012. We are continuing to plan our production around demand in an effort to maintain a higher working capital,” said John Liperote, CEO of Lipari Energy.

The company operates mines through subsidiary B & W Resources. Those mines include Chavies, a surface, contour and auger operation located in Leslie and Perry counties, Ky., and Owls Nest, a surface and contour mining operation in Leslie County. 

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.