Arch Coal reports $30 million profits so far in 1998
The state's largest coal producer has made nearly $30 million in profits so far in 1998, company officials announced Tuesday.
Arch Coal Inc. reported earnings of $29.9 million for the three quarters that ended Sept. 30, 1998, according to Deck Slone, Arch's director of public affairs.
During the third quarter of 1998, from July 1 through Sept. 30, Arch reported earnings of $500,000 on $424 million in revenues.
These results included a positive, after-tax impact of $11.3 million from the sale of some inactive coal properties in eastern Kentucky, Slone said in a news release.
In comparison, St. Louis-based Arch Coal had a net loss of $13 million for the same period in 1997. That included a one-time, after-tax charge of $23.8 million related to the merger with Ashland Coal Inc.
"The third quarter, which is traditionally our weakest earnings period, was especially difficult this year due to a number of previously announced operating challenges," said Steven F. Leer, Arch Coal's president and CEO. "However, we are pleased that, in spite of those challenges, we continued to generate very significant levels of cash."
Arch's coal sales for the third quarter totaled 25.9 million tons, compared with 12.6 million tons for the same period in 1997. Increases in sales tonnage were caused by the purchase in June of ARCO's coal holdings in Wyoming and other western states, the company said.
Arch Coal reported revenues of $1.1 billion and coal sales of 54.5 million tons during the first nine months of 1998, the company said.
The company said that third-quarter results were also adversely affected by higher-than-expected maintenance costs in July during routine mine shutdowns in connection with miners' vacations, unfavorable geologic conditions at Arch's Hobet 21 and Dal-Tex mines in West Virginia, and poor rail service at western operations.
Offsetting those negative impacts was the Sept. 29 sale of properties in eastern Kentucky that previously supported Arch Coal's No. 37 mine, which closed in January 1998.
This sale resulted in a pre-tax gain of $18.5 million, including the assumption of $4 million in reclamation liabilities.
"Our ongoing, long-term objective is to lease or sell those assets that are not performing or do not fit our long-term strategy," Leer said. "Our land subsidiary, Ark Land, is operated as a profit center and is constantly reviewing our properties in an effort to identify assets that fit one or both of those criteria."
Arch Coal is the nation's second and West Virginia's largest coal producer. In its Tuesday statement, Arch Coal also repeated its call for federal regulators to allow the state Division of Environmental Protection to issue a permit to expand the mountaintop removal mining at the company's Dal-Tex operations.
The U.S. Environmental Protection Agency has halted the 3,100-acre permit extension because of concerns of the mine's impacts on the environment.
"As previously stated, we will also need to secure the new permit for the Dal-Tex operation in a timely fashion in order to realize improvements there and avoid curtailment of operations at that complex," Leer said.
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