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Alliance Resource Partners end of 2015 results

Published by
World Coal,

Alliance Resource Partners, L.P. has reported financial and operating results for the year ended 31 December 2015.

Revenues for 2015 decreased to US$2.27 billion, a decline of 1.2% compared to 2014, due to a 3.5% decrease in coal sales prices, which offset record coal sales volumes. Lower revenues and the net US$77.6 million impact in 2015 of non-cash items led to reduced EBITDA of US$670.0 million – a decrease of 16.7% compared to the previous year.

Coal sales revenues in the 2015 Year declined as a result of lower coal prices partially offset by increased coal sales volumes at the Tunnel Ridge and Gibson South mines in addition to coal sales volumes from ARLP’s recent acquisition of the Hamilton mine No. 1.

The company set new records in the 2015 Year for both short t sold, which increased 1.3% to 40.2 million short t, and short t produced, which rose 1.1% to 41.2 million short t, both as compared to 2014.

ARLP’s other sales and operating revenue increased US$16.0 million in 2015 primarily due to White Oak’s start-up of longwall production in late October 2014 and the resulting increase in Alliance’s opencast facility services and coal royalties prior to the White Oak Acquisition.

ARLP’s results for the 4Q15 were also lower compared to same quarter last year. Total revenues declined 8.2% to US$542.2 million, compared to 4Q14, as coal sales fell due to lower coal sales prices and reduced sales tons reflecting customer deferrals of scheduled coal shipments and, as anticipated, the decrease of other sales and operating revenues following ARLP’s acquisition of the remaining equity interests in White Oak Resources LLC and the assumption of operating control of the White Oak Mine No. 1 on 31 July 2015.

Lower revenues and the US$66.9 million net impact of non-cash items reduced net income and EBITDA in 4Q15 compared to the 4Q14, as net income decreased 82.6% to US$21.5 million, or US$(0.19) per basic and diluted limited partner unit, and EBITDA decreased 40.8% to US$120.0 million.

"During 2015, ARLP maintained its position as a leader in the coal industry. Our operations and marketing teams produced and sold record volumes leading ARLP to deliver profits and solid cash flows in what was arguably one of the most challenging years in the history of our industry," said Joseph W. Craft III, President and Chief Executive Officer. "Faced with weak power demand, persistently low natural gas prices, ongoing regulatory pressures and an oversupplied coal market, we were able to achieve these results relying on ARLP’s long-term sales agreements and our ability to reduce operating expenses and capital expenditures. In response to lower demand and unsustainably low spot coal pricing, we adjusted ARLP’s operating portfolio and shuttered certain higher-cost operations, which led to non-cash impairments that reduced our financial results for the 2015 quarter and year."

Edited from press release by Harleigh Hobbs

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