Warrior Met Coal, the leading U.S. producer and exporter of metallurgical coal for the global steel industry reported a second quarter 2020 net loss of $9.2 million, compared to net income of $125.5 million, in the second quarter of 2019. “As a result of the ongoing global health crisis, the met coal industry experienced a substantial reduction in customer demand and significantly lower pricing than we have seen in past quarters,” Warrior CEO Walt Scheller said. “Despite these challenges, we have worked hard to successfully manage our costs, working capital, and capex spending to preserve our financial flexibility and emerge from this period stronger than ever. Notably, this work has enabled us to be free cash flow positive, despite the declining price environment and lower sales volumes.”
“We continue to maintain our strong balance sheet and adequate liquidity, which will benefit Warrior when the global economic situation improves. Moreover, while the timing of the recovery is still unknown, our long-term growth drivers remain compelling,” Scheller said. “We are currently continuing to operate our mines, in accordance with the Centers for Disease Control and Prevention and state regulators and have taken additional precautions to protect the health and safety of our employees.
The company produced 2.1 million tons of met coal in the second quarter of 2020 compared to 2.2 million tons in the second quarter of 2019. Sales volume in the second quarter of 2020 was 1.5 million tons compared to 2.2 million tons in the second quarter of 2019, which was a record high quarter. Inventory levels rose to 1.6 million tons at the end of the second quarter of 2020 from 978,000 tons at the end of the first quarter of 2020.