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Met, thermal CAPP business boosts Rhino Q2 earnings

Time:2017-08-10
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An active Central Appalachian metallurgical and thermal coal market boosted Rhino Resource Partners' second-quarter business, the producer said Wednesday.

Rhino's CAPP sales volumes grew 19.1% quarter over quarter to 386,000 st, while prices fell 7.8% to average $66.42/st, Rhino said in its earnings report. Thermal prices averaged $51.11/st, down from $52.31/st in Q1, but sales volumes surged 59.2% to 203,100 st. Met prices averaged $83.45/st, down from $84.82/st in Q1, with volumes dipping 6.8% to 182,500 st.

CAPP revenues of $25.6 million were up 9.9% from Q1 and accounted for 39% of the producer's total $56.5 million in revenues during the quarter.

"The recovery in the coal markets, especially the met market, continues to yield a very positive impact on our operating results," CEO Rick Boone said in a statement.

Both CAPP revenues and sales volumes more than tripled from a struggling market in the year-ago quarter when the company saw an income of $5.6 million from the basin on 88,000 st sold.

Boone said Rhino is fully contracted for its forecast met and thermal production for the remainder of this year has begun making long-term sales contracts for 2018 through 2020. He added the company is looking at long-term seaborne met sales and recently sent a 44,000 mt "test shipment" to a major steel company that "could lead to a multi-year sales agreement."

Rhino said it has 816,600 st of CAPP coal committed for the second half of the year at an average price of $71.15/st and 827,000 st committed for 2018 at an average price of $56.17/st. The company said 2018 commitments include 750,000 st of thermal coal and 80,000 st of met coal to a domestic customer.
IB SALES UP, PRICES STEADY

In the Illinois Basin, Rhino sold 357,000 st from its Pennyrile complex in Q2, up 4.7% from the first quarter, at an average price of $49.30/st, down 2 cents from Q1. The producer has 1.3 million st from the Pennyrile contracted for this year, including a recent utility deal at 400,000 st, and 550,000 st committed for 2018.

Northern Appalachian sales were down 36.4% quarter over quarter to 75,000 st at an average price of $36.10/st, down $1. Sales fell from both the Sands Hills and Hopedale operations, with more coal at cheaper prices sold from Sands Hill.

Rhino said it has 882,100 st of combined IB/NAPP sales for the second half of the year at an average price of $45.23/st and 550,000 st committed for 2018 at an average price of $39.75/st.

The producer sold 229,000 st from its Castle Valley complex in Utah, up 19.9% from Q1, at an average price of $38.31/st, up 12 cents. Rhino has 527,500 st of western coal committed for the second half of the year at an average price of $36.22/st and 300,000 st committed for 2018 at an average price of $38/st.

 


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