Consol Q2 coal sales rise on near-record export demand

Consol Energy produced 5.9 million st of coal in the second quarter, down from 7.02 million in Q1 and up from 2.4 million st in the year-ago quarter, the company said Aug. 3.

The company's Q2 coal sales of 5.9 million st generated an average revenue of $44.02/st, compared to 2.3 million st sold at an average revenue of $43.82/st in the year-ago period.

Consol's average cash cost of coal sold in Q2 was $28.02/st, resulting in an average cash margin of $16/st, compared with average cash costs of $25.90/st and an average cash margin of $17.92 in the year-ago quarter. The company's average cash margin for Q1 was $16.95/st.

The company reported a net cash increase of roughly $108.73 million at the end of the second quarter with $200.20 million in cash and cash equivalents, compared with a decrease of $45.80 million to end the quarter with $33.03 million in the year-ago quarter. Consol recorded net income of $4.17 million in Q2, up from a loss of $21.06 million in the year-ago quarter.

Export markets

In the second quarter, Consol's Marine Terminal in Baltimore logged throughput volumes of 3.8 million st, up from 1.6 million st in the year-ago period.

Of the company's sales in Q2, 3.2 million st, or 55%, went into the export market, compared with a record-high 3.3 million st, the equivalent of 48%, in the prior quarter.

"A significant arbitrage on export spot pricing opportunities versus domestic spot prices continued in the second quarter," the company said in its earnings statement.

Revenues and operating costs at the Marine Terminal were $17.4 million and $9.5 million, respectively, up from $15.9 million and $8.4 million, respectively, in the year-ago quarter.

Net income at CMT was $8.2 million in Q2, up from $7.8 million in the year-ago period.

2021 booked sales

Consol increased its 2021 contracted sales during Q2 to 24.6 million st at an average revenue per ton of $44.02/st, assuming PJM West power forwards of $34.75/MWh.

Due to an increase in domestic demand, Consol increased its contracted volumes for 2022 from 5.6 million st in Q1 to 10.9 million st in Q2.

The company's 2021 targeted coal sales volume is 23.5 million to 25.0 million st, and the average cash cost of coal sold per ton is expected between $27 and $28/st.