Cloud Peak Energy’s Net Losses Widened in 2Q15



2Q15 Adjusted EBITDA

Cloud Peak Energy (CLD) reported adjusted earnings before interest, tax, depreciation, and amortization (or EBITDA) of $10.6 million in 2Q15 compared to $45.2 million in 2Q14. As we explained in earlier parts of this series, the company’s adjusted EBITDA narrowed as its shipments and pricing fell during the quarter amid increases in costs per ton.

In 2Q15, the company’s coal segment reported adjusted EBITDA of $17.1 million compared to $42.0 million in 2Q14, while its logistics segment reported adjusted EBITDA losses of $6.4 million compared to adjusted EBITDA of $2.7 million in 2Q14.

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2Q15 net losses

Cloud Peak Energy’s net losses came in at $52.9 million in 2Q15 compared to $2.0 million in 2Q14. The net losses translate to $0.87 per share in 2Q15 compared to $0.04 per share in 2Q14. The company took on a $33.4 goodwill impairment charge related to its Cordero Rojo Mine, where the company is currently curtailing production. Weak demand for the kind of coal (8,400 Btu/lb) the mine produces was the primary reason for the impairment and production curtailment. A higher income tax benefit and marginally lower interest expenses marginally offset the impact of lower adjusted EBITDA and higher non-cash charges. Adjusted net losses (after adding back non-recurring expenses such as goodwill impairment) came in at $16.9 million or 28 cents per share.

Peabody Energy (BTU) and Arch Coal (ACI) have reported net losses in 2Q15 while Alpha Natural Resources (ANRZ) has yet to publish its 2Q15 earnings. ANRZ filed for bankruptcy on Monday, August 3, 2015. Last week, we covered the possibility of this bankruptcy in detail in our series on ANRZ. Even Consol Energy (CNX) posted a loss in 2Q15 amid weak coal (KOL) and natural gas prices.


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