Corsa Coal Announces Financial Results for Third Quarter 2021
Canada NewsWire
FRIEDENS, Pa., Nov. 3, 2021
FRIEDENS, Pa., Nov. 3, 2021 /CNW/ - Corsa Coal Corp. (TSXV: CSO) (OTCQX: CRSXF) ("Corsa" or the "Company"), a premium quality metallurgical coal producer, today reported financial results for the three and nine months ended September 30, 2021. Corsa has filed its unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 and related management's discussion and analysis under its profile on www.sedar.com.
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.
Third Quarter 2021 Highlights
-- Key financial results and operational statistics are shown below:
Three months ended Nine months ended
September 30, September 30,
(in millions except 2021 2020 2021 2020
per share, per ton
and sales tons)
Net and comprehensive
income (loss) $ 0.9 $ (3.6) $ (1.3) $ (50.7)
Non-cash asset
impairment
adjustment (included
above) $ - $ - $ - $ (41.7)
Diluted earnings
(loss) per share $ 0.01 $(0.04) $ (0.01) $ (0.47)
Adjusted EBITDA(1) $ 4.1 $ (4.8) $ 7.0 $ 5.8
EBITDA(1) $ 6.2 $ 1.8 $ 13.3 $ (32.6)
Cash (used in)
provided by
operating activities $ 4.2 $(10.3) $ 3.0 $ 10.9
Total revenue $ 36.4 $ 23.6 $ 91.4 $ 111.7
Average realized
price per ton of
metallurgical coal
sold(1) $ 112.75 $ 66.54 $ 97.46 $ 81.73
Cash production cost
per ton sold(1) $ 92.24 $ 77.15 $ 83.00 $ 70.13
Company produced
sales tons 286,678 286,944 828,260 1,008,622
Value added services
sales tons 11,760 617 31,833 32,619
Sales and Trading
sales tons - - - 136,663
Total sales tons 298,438 287,561 860,093 1,177,904
-- Corsa's average realized price for the third quarter 2021 is the
approximate equivalent of between $174 to $179 per metric ton on an FOB
vessel basis(2). For the third quarter 2021, Corsa's sales mix included
41% of sales to domestic customers and 59% of sales to international
customers.
-- In the third quarter 2021, the Company's U.S. subsidiaries, Wilson Creek
Holdings, Inc. and Wilson Creek Energy, LLC, received full forgiveness of
the Paycheck Protection Program loans received in April 2020. The
Company previously recognized $7.2 million of grant income in the three
months ended September 30, 2020 and the remaining $1.1 million was
recognized as grant income in the three months ended September 30, 2021.
(1) This is a non-GAAP financial measure. See "Non-GAAP
Financial Measures" below.
(2) 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 $45-$50
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.
Bob Schneid, President and Chief Executive Officer of Corsa, commented, "The third quarter of 2021 appears to have marked a turning point for Corsa as the metallurgical coal market rebounded, spot pricing continued to rise and our mines started to return to pre-pandemic operating levels. We started to see the impact of the strong spot market for our low volatile metallurgical coal during the third quarter of 2021 and our average selling price increased accordingly. The majority of our shipments during the quarter, however, were delivered to customers with below market contracts. Our average selling price is expected to rise as all of these below market contracts expire by the end of this year."
"Our cash costs per ton sold increased significantly during the quarter due to: (1) planned outages which lowered production and increased repair and maintenance expenditures, (2) challenging conditions at two of our underground mines that slowed advance rates and increased costs, (3) a reduction in lower cost surface mine production as we transitioned our Schrock Run surface mine to a new mining area, and (4) the inefficiencies associated with hiring and training new, less experienced, employees. Corsa is committed to making the investments in our people and our assets that will position us to take full advantage of the improved metallurgical coal market and to generate the returns for our shareholders."
Financial and Operations Summary
For the three months ended September 30, For the three months ended September 30, Increase Increase (in thousands) 2021 2020 (Decrease) 2021 2020 (Decrease) Revenues $ 36,380 $ 23,586 $ 12,794 $ 91,425 $ 111,651 $ (20,226) Cost of sales $ 35,448 $ 32,004 $ 3,444 $ 92,238 $ 117,502 $ (25,264) Cost of sales - asset impairment - - - - 41,684 (41,684) Total cost of sales(2) $ 35,448
$ 32,004
$ 3,444
$ 92,238
$ 159,186
$ (66,948)
Selling, general and administrative expense $ 2,293
$ 2,507
$ (214)
$ 6,523
$ 7,060
$ (537)
Net and comprehensive loss for the period $ 933
$ (3,579)
$ 4,512
$ (1,347)
$ (50,681)
$ 49,334
Cash provided by operating activities $ 4,231
$ (10,327)
$ 14,558
$ 2,976
$ 10,882
$ (7,906)
EBITDA(1) $ 6,214
$ 1,820
$ 4,394
$ 13,310
$ (32,563)
$ 45,873
Adjusted EBITDA(1) $ 4,125
$ (4,839)
$ 8,964
$ 6,967
$ 5,821
$ 1,146
Coal sold - tons
NAPP -- metallurgical coal 298
288
10
860
1,178
(318)
(1) This is a non-GAAP financial measure. See "Non-GAAP Financial Measures" below.
(2) Cost of sales consists of the following:
For the three months ended For the nine months ended September 30, September 30, (in thousands) 2021 2020 2021 2020 Mining and processing costs $ 24,628 $ 21,012 $ 64,685 $ 66,147 Purchased coal costs 1,529 39 4,002 13,613 Royalty expense 1,775 1,509 4,222 5,204 Amortization expense 4,670 4,966 12,726 16,490 Transportation costs from preparation plant to customer 1,570 3,426 4,294 12,835 Idle mine expense 190 129 493 294 Tolling costs 281 221 518 793 Change in estimate of reclamation provision - - - 278 Limestone costs 282 (24) 708 316 Write-off of advance royalties and other assets - 65 - 484 Other costs 523 661 590 1,048 Cost of sales $ 35,448 $ 32,004 $ 92,238 $ 117,502 Cost of sales - asset impairment $ - $ - $ - $ 41,684 Total cost of sales $ 35,448 $ 32,004 $ 92,238 $ 159,186
For the three months endedSeptember 30, For the nine months endedSeptember 30, 2021 2020 Variance 2021 2020 Variance Realized price per ton sold(1)
NAPP -- metallurgical coal $ 112.75
$ 66.54
$ 46.21
$ 97.46
$ 81.73
$ 15.73
Cash production cost per ton sold(1)(2)
NAPP -- metallurgical coal $ 92.24
$ 77.15
$ (15.09)
$ 83.00
$ 70.13
$ (12.87)
Cash cost per ton sold(1)(3)
NAPP -- metallurgical coal $ 92.55
$ 77.01
$ (15.54)
$ 83.03
$ 71.63
$ (11.40)
Cash margin per ton sold(1)
NAPP -- metallurgical coal $ 20.20
$ (10.47)
$ 30.67
$ 14.43
$ 10.10
$ 4.33
EBITDA(1) (000's)
NAPP $ 7,140
$ 2,569
$ 4,571
$ 16,241
$ (30,140)
$ 46,381 Corporate (926)
(749)
(177)
(2,931)
(2,423)
(508) Total $ 6,214
$ 1,820
$ 4,394
$ 13,310
$ (32,563)
$ 45,873
Adjusted EBITDA(1) (000's)
NAPP $ 4,828
$ (4,346)
$ 9,174
$ 9,147
$ 7,729
$ 1,418 Corporate (703)
(493)
(210)
(2,180)
(1,908)
(272) Total $ 4,125
$ (4,839)
$ 8,964
$ 6,967
$ 5,821
$ 1,146
(1) This is a non-GAAP financial measure. See "Non-GAAP
Financial Measures" below.
(2) Cash production cost per ton sold excludes purchased
coal. This is a non-GAAP financial measure. See "Non-GAAP
Financial Measures" below.
(3) Cash cost per ton sold includes purchased coal. This
is a non-GAAP financial measure. See "Non-GAAP Financial
Measures" below.
Coal Pricing Trends and Outlook
Price levels opened the third quarter 2021 at $198.00/metric ton ("mt") delivered-to-the-port ("FOBT") for spot deliveries of Australian premium low volatile metallurgical coal and closed the quarter at $388.50/mt FOBT. The quarterly average price for the third quarter of 2021 was $263.66/mt FOBT, compared to $137.46/mt FOBT in the second quarter of 2021, and traded in a range from a high of $408.50/mt FOBT to a low of $198.00/mt FOBT. October 2021 spot market pricing opened the month at $390.00/mt FOBT and closed the month at $402.50/mt FOBT with trades in a range from a high of $402.50/mt FOBT to a low of $390.00 /mt FOBT for an average price of $398.01/mt FOBT.