Dahlman Rose Reiterates Hold Rating on James River Coal Company on Announced Major Restructuring

In a report published Friday, Dahlman Rose reiterated its Hold rating on James River Coal Company

. Dahlman Rose noted, “In response to weak markets and a high CAPP operating cost structure, JRCC announced a major restructuring that idles 3MM tons of capacity in CAPP. Curtailments are focused on thermal coal operations in KY, as the company shifts its focus to int'l met and higher-value PCI and stoker coal markets. Short-term contracting was maintained, as its 2014 book remained flat; however, 1.6MM tons of CAPP coal were priced for 2013, consisting of 1.5MM tons of met and 0.1MM tons of thermal – bringing CAPP thermal sales to 3.5MM tons. While the shift in product mix should lead to higher realizations, we would also expect unit costs to rise due to lower volume and a higher met coal share.” James River Coal Company closed on Thursday at $2.55.