He added, “Warrior’s unique value proposition is based on two principal factors: the strength of our met coal assets, and our competitive positioning as a formidable operator in the era of ‘new coal.’”
Warrior began trading on the New York Stock Exchange on April 13.
Mine No. 4 and mine No. 7 were both operational during the first quarter of 2017, with one longwall at mine No. 4 and two longwalls at mine No. 7. Both mines continued to ramp up production toward the company’s historical annual production level of approximately 8 million short tons. Warrior produced 1.6 million short tons of met coal in the first quarter 2017, which was 33% better than expected, and included the move of one longwall operation.
“There is significant growth potential embedded in Warrior’s existing operations,” Scheller said. “We have improved our productivity and advance rates as our workforce continued to skill up, and we will commit our catch-up capital spending to realize nameplate production capacity in our two mines of about 8 million short tons per year.”
Total revenues were $254 million for the first quarter of 2017, including $241.1 million in mining revenues, which consisted of met coal sales of 1.1 million tons at an average selling price of $213.89/ton. During this period, the company reported net income of $108.3 million, or $2.06 per share. Adjusted Net Income for the first quarter 2017 was $117.2 million, or $2.22 per share, and Adjusted EBITDA for the quarter was $135.5 million.
Cost of sales for the first quarter of 2017 were $106.1 million, or 41.8% of total revenues, and included mining costs, transportation and royalty costs. Cash cost of sales (free-on-board port) was $93.75/ton in the first quarter that reflects higher volumes and realized pricing, which increases wage, transportation and royalty costs.
Warrior Met Coal expects to continue to ramp up production at its mines in 2017 from the levels achieved in 2016. Given the positive results of the first quarter, including production that was 33% higher than its plans, the company has updated its production guidance to 6.1 million to 6.5 million tons for 2017.
Warrior Met Coal exports a premium hard coking coal (HCC). The HCC that Warrior mines from the Blue Creek coal seam contains very low sulfur and has strong coking properties and is of a similar quality to coal referred to as the benchmark HCC produced in Australia. The premium nature of Warrior’s HCC makes it ideally suited as a base feed coal for steel makers and results in price realizations near the HCC benchmark. Warrior sells all of its met coal production to steel producers in Europe, South America and Asia.