Murray Energy Sales Said to Drop Amid Canceled Coal Contractsby
Murray Energy Corp., the miner founded and run by Robert E. Murray, told creditors this week coal sales fell almost 9 percent in the third quarter, according to three people with knowledge of the company’s performance.
Net coal revenue dropped to about $713 million in the three months ended Sept. 30 from $781 million a year earlier, said the people, who asked not to be identified discussing the report. Sales this year fell 14 percent to $2.03 billion, the people said. Murray doesn’t publicly disclose its financial data.
Murray told creditors on a conference call Thursday that adjusted earnings before interest, taxes, depreciation and amortization rose 16.2 percent from a year earlier to $196.6 million, the people said. The increase came from about $40 million the coal miner collected in one-time fees from customers who terminated contracts, the people said. It also told investors that it received $25 million as a distribution from U.S. coal miner Foresight Energy LP, in which Murray bought a stake this year.
Foresight said last month it would suspend distributions to holders of its subordinated units as it seeks to preserve cash.
Gary Broadbent, a spokesman for Murray Energy, declined to comment on the results, saying that the company’s financial information is confidential.
U.S. coal miners are fighting through the industry’s worst downturn in decades. Thermal coal used by power plants is being undermined by tougher emissions standards and cheap natural gas. The price of Illinois Basin coal, where Murray and Foresight both operate, is at its lowest since 2007, according to data compiled by Bloomberg.
Murray redeemed $83.4 million of its debt during the quarter, including $50 million of term loans and the remainder in second-lien notes, the people said. It also has purchased in the open market $56 million of loans so far in the fourth quarter, the people said.
The company’s $1.3 billion of second-lien bonds due 2021, which plunged to as low as 27 cents on the dollar on Oct. 30, traded at 34 cents Friday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bonds were trading at par as recently as May.