Cloud Peak Energy Inc. (NYSE:CLD) Q3 2018 Earnings Conference Call Transcript
Oct 25, 2018 • 05:00 pm ET
Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Cloud Peak Energy Inc. Third Quarter 2018 Earnings Conference Call. At this time all participants are in a listen-only mode. Following management's prepared remarks we will host the question-and-answer session and our instructions will be given at that time. (Operator Instructions) As a reminder, this conference call is being recorded for replay purposes.
It is now my pleasure to hand the conference over to Mr. Bryan Pechersky, EVP and General Counsel. Sir, you may begin.
Good afternoon. With me today are Colin Marshall, Cloud Peak Energy's President and CEO, and Heath Hill, CFO.
(Forward Looking Cautionary Statements)
I'll now turn the call over to Colin Marshall.
Thank you, Bryan. Good afternoon, and thank you for taking the time to listen to our Q3 2018 results call. I'm joined by Heath Hill, our CFO.
Our shipments through were reduced during the third quarter by operational issues at the Antelope Mine related to the heavy rains during the second quarter. Our export business ran well, with strong demand from our Asian customers that allowed us to export 1.5 million tons during the quarter and generate $10.5 million of adjusted EBITDA. There were two reportable injuries during the quarter at our mines, and our rolling 12-month all-injury frequency rate at the end of the quarter was 0.23 injuries per 200,000 hours worked. There were no reportable environmental incidents during the quarter.
As we reported during our Q2 earnings call, heavy rain and timing issues reduced shipments from the Antelope Mine during that quarter. The immediate impacts of the rain, such as flooding and reduced truck/shovel productivity, were largely behind us by late July. However, the moisture from the rains caused significant spoil instability in both our dragline pits which started in mid-August. As coal was removed, the wet spoils moved into the pit blocking access to the coal. The spoil had to be removed from the pit by a combination of truck/shovel and dragline rehandle. This work reduced the amount of coal available to ship and increased our costs significantly. The spoil continued to move into the pits until the final coal was removed last week.
Rehandling unstable spoil diverted truck/shovel capacity from its planned pre-strip work in front of the draglines during the quarter. As we are now behind on pre-strip, Q4 shipments will continue to be constrained as the truck/shovel pre-strip work has to be advanced to allow the draglines to progress. Our current forecast is that the pits will return to their normal cycle at the end of the year. Our shipment guidance has been adjusted down to reflect the reduced shipments. We are actively working with our customers to try and minimize the impact of this disruption by deferring some Antelope shipments into 2019 or offering to supply them from the Cordero or Spring Creek mines, which have not had the same operational issues.
During the quarter, our export shipments went as planned, with 1.5 million