Net income rose to $30.1 million for Westmoreland Coal Co. in earnings of the first quarter of2016 compared to a loss of $13.9 million the same period last year, though revenuewas down by around $16.8 million.
The company's results included a $47.9 million income tax benefit.The company reported a loss before the income tax benefit of $17.8 million. Revenueof $354.7 million in the recent quarter was down from the $371.5 million it postedin the first quarter of 2015.
"Despite weak power demand during the first quarter, whichwas one of the warmest quarters on record, our mine-mouth and cost-protected modelagain helped us deliver solid results, especially cash flows," said KevinPaprzycki, Westmoreland's CEO, in a release. "We continue to makeprogress on our cash generation initiatives as we work towards paying down our debtlate in the year. Our goal is to create value for Westmoreland's investors by generatingcash and strengthening our balance sheet."
Cash flow from operating activities increased to $18.2 millionfrom $1.6 million.
Westmoreland's Rosebud mine in Montana increased output by 7.4% in the year ending in the firstquarter of 2016 compared to the prior year, and had a slight single-quarter increaseof tonnage in the recent quarter compared to the same period last year — the onlymine in the top 25 producers of the Powder River Basin to do so.
"We have visibility into our cash flow stream because weentered this year with nearly 90% of our tons under cost-protected contracts,"Paprzycki said. "Our cash generation, considering normal seasonality, willstrengthen following the second quarter which typically experiences the year's lowestenergy demand. We will look to reduce debt later in the year with our increasedcash flow."
The company's Absaloka mine in the PRB produced around 570,000fewer tons in the first quarter of 2016 compared to the same period last year. Thecompany reiterated a 2016 goal of selling 53 million tons to 60 million tons intheir earnings release.
Westmoreland is among a handful of remaining publicly tradedcoal companies that havenot succumbed to bankruptcy due to extremely challenging market conditions.