TECO Coal turns in lower coal sales, net income loss in Q3 2013

TECO Energy (NYSE:TE) said Oct. 31 that its TECO Coal unit, which mines primarily in eastern Kentucky, had a third-quarter loss of $1.4m on sales of 1.5 million tons.

That is compared with net income of $17.4m on sales of 1.9 million tons in the same period in 2012.

In 2013, third-quarter results reflect an average net per-ton selling price, excluding transportation allowances, of $82 per ton, compared to $96 per ton in 2012. In the third quarter of 2013, the all-in total per-ton cost of sales was $84 per ton, within the full-year guidance range and lower than in prior quarters. The cost of sales in September was below the full-year 2013 cost guidance range.

TECO Coal recorded year-to-date 2013 net income of $2.3m on sales of 4.2 million tons, compared with $39.4m on sales of 4.9 million tons in the 2012 period. The 2013 year-to-date average net per-ton selling price was $85 per ton, compared with $96 per ton in 2012. The all-in total per-ton cost of sales was $85 per ton, which was essentially unchanged from 2012.

The cost of sales in the first quarter of 2013 included some higher-cost tons from December inventory that included costs associated with personnel reductions and with idling certain mining operations.

TECO Coal has 95% of its expected sales of between 5.2 million and 5.7 million tons contracted for 2013. The unsold tons are primarily high-vol A coal, which are forecast to be sold in the fourth quarter, but at lower prices than previously expected. On an operating basis, TECO Coal expects full-year results to be significantly lower than previously expected. Operating results are expected to be break-even in the fourth quarter, but financial results are expected to reflect additional tax benefits in the fourth quarter.

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.