American Resources Corporation (NASDAQ:AREC) reported strong second-quarter results on Thursday that showed the company executing well after making a dramatic shift from coal to mining metallurgical carbon used in steelmaking.
For its second quarter ended June 30, 2020, American Resources reported net income of $1.3 million, or $0.05 per share, compared with a net loss of $8.96 million, or a loss of $0.38 per share in the same period a year earlier.
The Fishers, Indiana-based infrastructure company said its earnings before interest, taxes, depreciation, and amortization, or EBITDA was $5.7 million.
In a statement, American Resources CEO Mark Jensen said: "Over the course of the second quarter our team continued to execute on the strategic transformation of the company to become a more diversified infrastructure company.”
He added: “We made significant progress in advancing our efforts to better our industry-leading position as a stable, long-term and low-cost supplier of metallurgical carbon. Additionally, we were able to demonstrate our ability to innovate and adapt by generating high-margin revenue from our recently established American Metals LLC subsidiary, which further diversifies our business model, while continuing to divest and monetize non-core assets."
In February, American Resources completed the restructuring of Perry County Resources (PCR), the company's fifth carbon processing and logistics complex which was acquired in September 2019.
During the second quarter, the company divested certain non-core assets in eastern Kentucky to further reduce the company's overall cost structure and environmental liabilities from its balance sheet and enhance the flexibility of its focused supply base in anticipation of worldwide infrastructure-related demand.
American Resources said that the company was “quite optimistic" on global infrastructure demand and believed governments would continue to “increase infrastructure projects as a way to stimulate economic activity as we recover” from the coronavirus pandemic.
“With the assets that we own today and the actions we have taken, we feel that we are in a great position to be a meaningful and growing supplier of raw materials to fulfil a portion of that demand,” said CEO Jensen.
“We believe the achievements we have made at our Perry County Resources complex have set it up to be one of the lowest, if not the lowest, PCI operations in the country that has production capabilities of over one million tons per year," he added.
The company said its McCoy Elkhorn complex is “prepared to be brought back online” as market conditions improve, and it was looking forward to advancing its Wyoming County complex towards production next year as a low-cost, premium mid-volume carbon complex.
American Resources said it is committed to being one of the lowest-cost operators in the Central Appalachian basin and throughout all its carbon mining, processing, and transportation operations. With operations in eastern Kentucky and West Virginia, the Indiana-based company extracts, processes, and sells metallurgical carbon to the steel industry.
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