Arch Coal in Discussions With Creditors
10 November 2015 - 3:00AM
Dow Jones News
Arch Coal Inc., reeling from the extended rout in the coal
market, posted a loss of $2 billion in the latest quarter. But the
company's adjusted loss and revenue came in better than expected,
and it said it was in discussions with creditors to restructure its
balance sheet as its cash thins.
Shares climbed 9% in early trading—though they've still dropped
58% in the past month, even factoring in Monday's gains.
Arch Chief Executive John W. Eaves said the company is seeking a
"significant restructuring" of its balance sheet, as cash flow "is
not sufficient to service our debt sustainably in this operating
environment." He noted the company was in discussions with
creditors.
Three major U.S. coal companies—Patriot Coal Corp., Alpha
Natural Resources Inc. and Walter Energy Inc.—filed for bankruptcy
protection this year.
Overall for the quarter, the company posted a loss of $2
billion, or $93.91 a share, compared with a loss of $97.2 million,
or $4.58 a share, a year earlier. Excluding certain items, the
adjusted loss per share was $3.38, compared with a loss of $4.52 a
year earlier. Revenue fell 7.2% to $688.5 million.
Analysts surveyed by Thomson Reuters forecast an adjusted
per-share loss of $5.45 on revenue of $679 million.
The company's overall loss was due to a $2.1 billion asset
impairment charge during the quarter. The company also posted a
$149 million loss linked to the bankruptcy of Patriot Coal.
"Our results reflect the actions we have taken to respond to the
challenging market environment, including reducing costs and
enhancing efficiency across the company," Mr. Eaves said. "Despite
these efforts, however, the difficult conditions impacting the coal
industry persist, and we expect they will continue throughout
2016," he added.
Coal burned by power plants faces competition from cheap and
relatively clean natural gas, and a slowdown in demand from China
has driven the price of coal used in steelmaking to an 11-year low.
Major U.S. producers are scaling back, trying to shed mines and
laying off employees.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
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(END) Dow Jones Newswires
November 09, 2015 10:45 ET (15:45 GMT)
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