Revenues were $479 million for the fourth quarter of 2012, down from $703 million in the fourth quarter of 2011 primarily due to reduced demand and pricing for met coal. The realized price of met coal declined 39% compared with the fourth quarter of 2011. Walter Energy reported a net loss for the quarter of $71 million. For the year, the company recorded revenues of $2.4 billion and a net loss of $1.1 billion.
During 2012, Walter Energy achieved record metallurgical coal production of 11.7 million metric tons and improved its cash cost per ton for met coal by 6%.
“Walter Energy made solid operational progress during 2012, in the face of challenging market conditions. We safely increased our production of met coal, strengthened our senior management team and put in place a highly competitive operating platform that reduced our cost of production,” said Walter Scheller, CEO, Walter Energy. “In the fourth quarter, we responded to the lower pricing and demand environment by executing the strategy announced last quarter to reconfigure our Canadian operations in order to lower production and reduce costs.
“Although there are clear signs of improving trends in global demand and pricing for met coal, our current outlook for 2013 remains cautious and we are focused on driving further efficiency in our business,” Scheller said. “We currently expect sales and production of met coal in 2013 to be in line with 2012. However, we are extremely well positioned to increase sales and production to capitalize on anticipated improvements in pricing and demand when market conditions warrant.”
In 2012, Walter Energy sold 10.4 million mt of met coal, up 19% from 8.7 million mt in 2011. Met coal prices averaged $149/mt in the fourth quarter, a decrease of 22% from the average of $191/mt in the third quarter of 2012, and a 39% decrease compared with the $242/mt of the fourth quarter 2011. The consolidated cash cost of sales for met coal was $135/mt in the fourth quarter of 2012, as compared with $132/mt in the third quarter of 2012 and $139/mt in the fourth quarter of 2011. In the U.S. operations, the cash cost of sales for met coal was $118/mt in the fourth quarter of 2012. In Canada, the cash cost of sales for met coal was $161/mt in the fourth quarter of 2012.
Walter Energy’s emphasis on safety continues to show results as the majority of locations are achieving lower total reportable injury rates. On a consolidated basis, Walter’s total reportable injury rate decreased by 26% in 2012 as compared with 2011.