TAMPA, Fla.--(BUSINESS WIRE)--TECO Energy, Inc. (NYSE:TE) today announced that it is updating the 2012 outlook for TECO Coal to reflect current market conditions.
TECO Energy President and Chief Executive Officer John Ramil said, “The team at TECO Coal is responding to changing market conditions by exercising good production discipline and eliminating unsold tons from its 2012 sales projections. Mild winter weather, low natural gas prices and worldwide economic conditions have caused the selling price for certain types of coal to decline over the past four months. At this time, rather than sell coal at current prices or build inventory, TECO Coal is scaling back production immediately and lowering its 2012 sales projections.”
Ramil went on to say, “I am optimistic that with the changes being implemented at TECO Coal it will continue the trend that we’ve seen since 2008 of growing operating earnings in 2012. The plans that TECO Coal is putting in place do not reflect permanent reductions in capacity. When the market recovers to levels that make economic sense to resume production, TECO Coal will ramp up production to meet new demand that develops.”
TECO Coal now expects sales in 2012 to be in a range between 7.0 and 7.3 million tons at an average selling price of more than $96.00 per ton, which reflects substantially all of the planned 2012 metallurgical coal sales committed and priced. In 2012, metallurgical coal sales volumes are expected to be at, or slightly above, 2011 levels. The 2012 sales mix is expected to be about 50% specialty coals, which includes metallurgical, stoker and PCI coals.
The average fully loaded cost of production in 2012 is expected to be in a range between $83.00 and $87.00 per ton. The cost per ton reflects a higher percentage of higher cost metallurgical coal in the sales mix and fixed costs spread over fewer tons.
TECO Energy will provide consolidated 2012 guidance and business driver outlook in conjunction with its fourth quarter 2011 earnings release on Feb. 2, 2012.
Note: This press release contains forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. Actual results may differ materially from those forecasted. The forecasted results are based on TECO Coal’s current expectations and assumptions, and the company does not undertake to update that information or any other information contained in this press release, except as may be required by law. Factors that could impact actual results include: regulatory actions by federal, state or local authorities; the availability of adequate rail transportation capacity for the shipment of TECO Coal's production; general economic conditions, both national and international, affecting the demand for TECO Coal 's production; commodity prices; operating cost and environmental or safety rule changes affecting the production levels and margins at TECO Coal; and the ability of TECO Coal to operate equipment without undue accidents, breakdowns or failures. Additional information is contained under "Risk Factors" in TECO Energy, Inc.'s Annual Report on Form 10-K for the period ended Dec. 31, 2010, and as updated in subsequent SEC filings.