SOURCE: AL.com
DATE: May 9, 2022
AUTHOR: William Thornton | wthornton@al.com
Warrior Met Coal reported a net income of $146.2 million in the first quarter, powered by a surge in price and demand for metallurgical coal.
At the same time, the company reported almost $10 million in costs associated to the ongoing strike with the United Mine Workers of America, now in its 13th month.
In an earnings report, Warrior Met stated that the price of met coal has increased 220% year-over-year, in part due to the ongoing conflict in Ukraine.
The company’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $243.8 million in the first quarter, an all-time record quarterly high.
CEO Walt Scheller said it was the company’s third straight quarter of strong profitability, and that Warrior Met is positioned to meet customers’ needs during a volatile economic climate.
“Our ability to leverage our strong operational base allowed us to take advantage of continued record pricing while also continuing to focus on managing expenses and increasing cash flows,” he said in a statement. “Demand for high quality premium coal remains on the upswing, and we are driving toward full operational mode. In addition, the war in Ukraine created a backdrop for further global supply constraints and price volatility, with urgent demand for non-Russian met coal.”
The company reported $6.7 million in expenses directly attributable to the UMWA strike, with additional idle mine expenses of $3 million. According to Warrior Met Coal’s quarterly reports, the company last year incurred $21.4 million in non-recurring expenses directly attributable to the strike for security and other expenses, and $33.9 million in idle mine expenses.
The strike affecting roughly 900 miners in Brookwood began on April 1, 2021, and is believed to be the longest in Alabama history.
Last month, the largest shareholder in Warrior Met Coal called for the company to put an end to the strike, with the investment stewardship team for BlackRock saying “prolonged operational disruptions, such as labor disputes, can have a negative impact on a company’s financial performance and business resilience.”
Last week, Warrior Met also announced it is relaunching the development of its Blue Creek reserves into a new longwall mine, spending approximately $650 to $700 million over the next five years to develop it.
