Coal production dropped in 2019 but Alliance Resources still saw increased income

One of the largest coal-mining companies in the U.S., Alliance Resource Partners, L.P. of Tulsa announced its total 2019 net income grew by nearly 9%.

 

For the 2019 Year, net income attributable to ARLP increased 8.9% to $399.4 million, or $3.07 per basic and diluted limited partner unit, compared to $366.6 million, or $2.74 per basic and diluted limited partner unit, for the year ended December 31, 2018.

The increase in net income resulted from a $170.0 million non-cash net gain related to the AllDale Acquisition, the addition of oil & gas royalty revenues and lower operating expenses in the 2019 Year, partially offset by decreased coal sales revenues and increased depreciation in the 2019 Year as well as an $80.0 million net gain on settlement of litigation in the 2018 Year.

EBITDA increased 9.7% in the 2019 Year to $753.8 million compared to $686.9 million in the 2018 Year. Adjusted EBITDA decreased 7.5% to $599.0 million in the 2019 Year, compared to $647.4 million for the 2018 Year.

For the 2019 Quarter, total revenues were $453.3 million compared to $531.8 million for the quarter ended December 31, 2018, primarily due to lower coal sales revenues resulting from reduced coal sales volumes and prices, partially offset by the addition of oil & gas royalty revenues in the 2019 Quarter. Lower total revenues, partially offset by lower total operating expenses, pushed net income attributable to ARLP for the 2019 Quarter down to $25.8 million, or $0.20 per basic and diluted limited partner unit, compared to $50.8 million, or $0.38 per basic and diluted limited partner unit, for the 2018 Quarter.

EBITDA and Adjusted EBITDA in the 2019 Quarter of $126.2 million were lower compared to EBITDA and Adjusted EBITDA in the 2018 Quarter of $136.4 million and $176.8 million, respectively.

ARLP also announced today that the Board of Directors of its general partner has decreased the quarterly cash distribution to unitholders for the 2019 Quarter to $0.40 per unit (an annualized rate of $1.60 per unit), payable on February 14, 2020 to all unitholders of record as of the close of trading on February 7, 2020. The announced distribution compares to quarterly unitholder distributions of $0.53 per unit declared for the 2018 Quarter and $0.54 per unit declared for the quarter ended September 30, 2019 (the “Sequential Quarter”).

 

Reflecting lower coal sales volumes and prices, coal sales revenues for the 2019 Year decreased 4.5% to $1.76 billion, compared to $1.84 billion for the 2018 Year. Coal sales volumes declined 2.8% to 39.3 million tons due primarily to lower export sales, partially offset by increased coal sales to domestic customers. Weak coal market conditions also impacted price realizations which declined 1.7% in the 2019 Year to $44.86 per ton sold, compared to $45.64 per ton sold during the 2018 Year. Reduced shipments of coal to international markets in the 2019 Year led transportation revenues and expenses lower by 11.5% to $99.5 million.

 

Source: Alliance Resources news release