Westmoreland Coal (NasdaqGM: WLB) on July 25 announced results for the second quarter of 2014, which includes the first results of its Canadian coal mining operations acquired on April 28.
Revenues for the quarter were $288m versus $162.5m in the same quarter in 2013. Adjusted EBITDA for the quarter was $39.6m. In recent guidance, the company had projected an adjusted EBITDA of $37m. Adjusted EBITDA for the second quarter of 2013 was $32m.
Net loss in the quarter was $63.4m and included charges of $20.2m related to acquisition costs and cost of sales related to inventory written up to fair value in the acquisition, $12.6m of extinguishment of debt, $7.5m of restructuring charges, $5m of duplicative and incremental interest incurred before the close of the transaction, and $3.4m of non-cash derivative based losses.
“As previously announced, we are ahead of schedule in transitioning the Canadian operations onto Westmoreland’s platform,” said Keith Alessi, Westmoreland CEO. “We have moved swiftly to streamline the organization, both in the United States and in Canada, and have been integrating and standardizing administrative functions. Operationally, we have begun the process of optimizing equipment utilization and we have reduced capital spending in the Canadian operation to reflect the Westmoreland philosophy of extending useful lives of equipment through superior maintenance.”
He added: “The adjusted EBITDA for the quarter is reflective of our progress and we are pleased with the results in comparison with 2013, especially when considering that the current quarter had ROVA’s annual maintenance outage and additionally did not benefit from the Indian Coal Tax Credit.”
In the U.S., the company sold 6.4 million tons of coal in the second quarter, up from 5.7 million tons in the year-ago quarter. Westmoreland’s second quarter 2014 U.S. coal segment revenues and tons sold increased primarily due to new customer sales at the Absaloka strip mine in Montana. Adjusted EBITDA was negatively impacted by weather impacts, rail service issues at Absaloka, and increased maintenance expenses.
Since the April 28 buy of the Canadian coal mining operations, which together are the largest thermal coal producer in Canada, the company sold 4.1 million tons of coal out of those mines.
Westmoreland Coal is the oldest independent coal company in the United States. The company’s coal operations include sub-bituminous and lignite coal mining in the Western United States and Canada. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina.