Corsa Coal Announces Financial Results for Second Quarter 2020

FRIEDENS, PA, Aug. 7, 2020

Unless otherwise noted, all dollar amounts in this news release are expressed in United States dollars and all ton amounts are short tons (2,000 pounds per ton). Pricing and cost per ton information is expressed on a free-on-board, or FOB, mine site basis, unless otherwise noted.

Second Quarter 2020 Highlights

• Due primarily to a non-cash adjustment of $41.7 million related to an asset impairment, Corsa reported net and comprehensive loss of $41.3 million and $47.1 million, or $(0.36) and $(0.43) per share attributable to shareholders, for the three and six months ended June 30, 2020, respectively, compared to income of $3.6 million and $6.6 million, or $0.03 and $0.05 per share attributable to shareholders, for the three and six months ended June 30, 2019, respectively.
• In response to the deterioration of both the domestic and export metallurgical coal markets, driven in large part by the COVID-19 pandemic, Corsa announces operational changes which include, among other things, a reduction in the operating shifts which will result in layoffs of a significant number of employees, thereby reducing coal production. The reduction in operating shifts is expected to reduce metallurgical coal sales tons in the second half of 2020 by 45% to 55% when compared to the first half of 2020.
• Corsa's adjusted EBITDA⁽¹⁾ was $4.3 million and $10.7 million for the three and six months ended June 30, 2020, respectively, compared to $10.1 million and $19.3 million for the three and six months ended June 30, 2019, respectively. Corsa's EBITDA⁽¹⁾ was a loss of $35.7 million and $34.4 million for the three and six months ended June 30, 2020, respectively, compared to income of $10.2 million and $19.8 million for the three and six months ended June 30, 2019, respectively.
• Cash production cost per ton sold⁽¹⁾ was $63.04 for the three months ended June 30, 2020, a decrease of $21.51 per ton, or 25%, as compared to the three months ended June 30, 2019. Cash production cost per ton sold⁽¹⁾ was $67.35 for the six months ended June 30, 2020, a decrease of $16.57 per ton, or 20%, as compared to the six months ended June 30, 2019.
• Cash flows provided by operating activities were $12.9 million and $21.2 million, for the three and six months ended June 30, 2020, respectively, compared to $8.8 million and $14.5 million for the three and six months ended June 30, 2019, respectively.
• Total revenues were $40.9 million and $87.6 million for the three and six months ended June 30, 2020, respectively, compared to $63.0 million and $120.3 million for the three and six months ended June 30, 2019, respectively.
• Low volatile metallurgical coal sales tons, comprised of "Company Produced" tons and "Value Added Services" purchased coal tons, were 336,928 and 2,426, respectively, in the three months ended June 30, 2020 compared to 319,202 and 94,903, respectively, in the three months ended June 30, 2019. In the three months ended June 30, 2020, Corsa sold a total of 102,076 "Sales and Trading" purchased coal tons, which are treated as pass-through from a profitability perspective, compared to 36,306 tons in the three months ended June 30, 2019.
• Corsa achieved an average realized price per ton of metallurgical coal sold⁽¹⁾ of $82.72 for all metallurgical qualities in the three months ended June 30, 2020 compared to $117.48 in the three months ended June 30, 2019. This average realized price for the second quarter 2020 is the approximate equivalent of $119 to $124 on an FOB vessel basis.⁽²⁾ For the second quarter 2020, Corsa's sales mix included 28% of sales to domestic customers and 72% of sales to international customers.
• In April 2020, certain wholly-owned subsidiaries of Corsa, as borrowers, entered into loan agreements with KeyBank National Association for an aggregate amount of approximately $8.4 million under the Paycheck Protection Program, which amounts are guaranteed by the U.S. Small Business Administration and are expected to be fully or substantially forgiven under the terms of the Paycheck Protection Program.

(1)

This is a non-GAAP financial measure. See "Non-GAAP Financial Measures" below.

(2)        ARIVA.DE Börsen-Geflüster Kurse CORSA COAL CORP. -   0,00%

Similar to most U.S. metallurgical coal producers, Corsa reports sales and costs per ton on an FOB mine site basis and denominated in short tons. Many international metallurgical coal producers report prices and costs on a delivered-to-the-port basis (or "FOB vessel basis"), thereby including freight costs between the mine and the port. Additionally, Corsa reports sales and costs per short ton, which is approximately 10% lower than a metric ton. For the purposes of this figure, we have used an illustrative freight rate of $25-$30 per short ton. Historically, freight rates rise and fall as market prices rise and fall. As a note, most published indices for metallurgical coal report prices on a delivered-to-the-port basis and denominated in metric tons.

Peter Merritts, Chief Executive Officer of Corsa, commented, "Corsa's strong and talented work force responded, as expected, to meet the challenges of the COVID-19 pandemic in the second quarter of 2020. Although we experienced some disruptions due to the virus, our employees and facilities operated safely and efficiently throughout the quarter. Our cash production cost per ton sold of $63 for the second quarter of 2020 and $67 for the first half of 2020 demonstrate the capabilities of our operations to meet challenging market conditions.

Unfortunately, the impact of the pandemic on the metallurgical coal market continues to put near-term downward pressure on metallurgical coal spot sales and also delays in recovery to pre-pandemic levels. As a result of the market dynamics, we recorded a significant non-cash asset impairment charge in our second quarter results and today announced the difficult decision to reduce our operations as a result of weakness in the domestic and export markets that we serve.

The operational discipline to reduce coal production is necessary as spot market prices are not sustainable and are often below production costs. The reduced output from our mines will align our operations to fulfill our current contracts and minimize the number of sales tons subject to the weakened spot market prices. We will continue to monitor pricing and opportunities in the market and have positioned the Company to quickly respond to increased prices and profitable opportunities as they arise."

2020 Second Quarter Sales Metrics

Corsa's metallurgical coal sales figures are comprised of three types of sales: (i) selling coal that Corsa produces ("Company Produced"); (ii) selling coal that Corsa purchases and provides value added services (storing, washing, blending, loading) to make the coal saleable ("Valued Added Services"); and (iii) selling coal that Corsa purchases on a clean or finished basis from suppliers outside the Northern Appalachia region ("Sales and Trading"). For the three and six months ended June 30, 2020, Corsa's sales were broken down into the following categories.

Financial and Operations Summary

	For the three months ended									For the six months ended
	June 30,									June 30,
							Increase									Increase
(in thousands)	2020			2019			(Decrease)			2020			2019			(Decrease)
Revenues	$	40,908		$	62,974		$	(22,066)		$	87,633		$	120,308		$	(32,675)
Cost of sales	$	40,075		$	55,017		$	(14,942)		$	85,158		$	104,919		$	(19,761)
Cost of sales - asset impairment	41,684			—			41,684			41,684			—			41,684
Total cost of sales(2)	$	81,759		$	55,017		$	26,742		$	126,842		$	104,919		$	21,923
Selling, general and administrative expense	$	2,444		$	4,155 Werbung Mehr Nachrichten zur CORSA COAL CORP. Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 19.05.24 - dpa-AFX dpa-AFX-Überblick: UNTERNEHMEN - Die wichtigsten Meldungen vom Wochenende 19.05.24 - wallstreet:online ... Paradigmenwechsel: Stehen Value-Aktien nach der Magnificent-Seven-Rallye vor einem Comeback? 19.05.24 - dpa-AFX China leitet Anti-Dumping-Untersuchung gegen Chemikalien aus EU ein