In the world of supply and demand, Foundation Coal has an edge.
Positioned in what experts refer to as the Powder River Basin, Foundation Coal Holdings FCL, a Linthicum-based producer, processor and seller of steam coal, has plenty of what the market is after. Many electricity generators rely on coal to fuel them; citing the resolution of railroad delivery issues, Morningstar analyst Elizabeth Collins sees “solid demand growth for the next several years.”
“A lot of the coal stocks have not been doing well lately relative to the past,” Collins said. “But in the future I think that, Powder River Basin coal prices will be stronger than they are now.”
Aside from the Powder River Basin, Foundation also has key mines located in the Illinois Basin and Northern and Central Appalachia.
Foundation reported a loss of $21.9 million in net income for the fourth quarter of 2006, a huge drop from the $28.6 million it earned in 2005. Foundation listed the write-down of assets at its Wabash mine and the accelerated amortization of deferred debt issuance costs related to the refinancing done thought company?s senior secured credit facility as reasons for the hit late in 2006. For the entire fiscal year, the company saw a drop in its net income of more than $50 million, falling to right around $31.4 million total. Despite these drops in the bottom line, Foundation did have a record year in coal sales revenues, generating more than $1.4 billion.
“We accomplished the record financial results despite disappointing performances from our Midwest and Central Appalachia business units and a production shortfall at one of our Northern Appalachia mines,” Foundation Chairman and CEO James F. Roberts said in a statement.
Foundation Coal Holding is part of The Examiner Top 10, which follows the stocks of 10 of the largest publicly held companies in the Baltimore region.
