Skip to main content

Alliance Resource Partners reports record coal production in Q1

World Coal,


Alliance Resource Partners has reported financial and operating results for Q1 2014. The company posted record coal production and solid cost control in each of its operating regions. The company’s net income rose to a record US$ 115.9 million and EBITDA also climbed to a record US$ 190.4 million for the quarter.

President and CEO of Alliance, Joseph Craft III, said the company had: “Continued its record-setting performance in the first quarter of 2014, starting the year by establishing new quarterly benchmarks for coal production, EBITDA and net income.”

“Several factors contributed to these strong results. Our Tunnel Ridge mine completed a major longwall move in late January and its revised mine plan performed above expectations for the quarter, helping drive production in our Appalachian region higher by almost 25%. Collectively, our operations were able to operate efficiently despite severe winter weather during the quarter, pushing ARLP’s sequential Segment Adjusted EBITDA expense lower by 6.5% or US$ 2.34/t sold,” Craft added.

Craft also noted that the company’s new Gibson South mine had also started initial production ahead of schedule. “The increased production now expected this year from both Tunnel Ridge and Gibson South, combined with ARLP booking approximately 7.8 million t of new sales commitments during the 2014 Quarter, put us on track to achieve our fourteenth consecutive year of record results. Based on our record quarterly results and its confidence in ARLP’s future performance and growth prospects, the Board announced today a two-for-one unit split and elected to increase unitholder distributions for the twenty-fourth consecutive quarter," he said.

Coal production and company finances

For Q1 2014, revenues decreased slightly to US$ 542.0 million compared to US$ 548.1 million for Q1 2013. Weather-related transportation disruptions in the Illinois Basin and the cessation of operations at the Pontiki mine in November 2013 resulted in lower coal sales volumes, which declined 2.1% to 9.5 million t, despite higher sales volumes from the longwall operation at Tunnel Ridge.

Increased production from the Tunnel Ridge mine and strong performance at the Dotiki and MC Mining mines contributed to record coal production of 10.3 million t, an increase of 4.4% compared to Q1 2013. Although total coal production increased during Q1 2014, total operating expenses declined by 7.6%. According to Alliance, this decrease reflects a favourable production mix in the 2014 Quarter, primarily due to increased longwall production and improved recoveries at the Tunnel Ridge mine and the absence of higher cost production at the Pontiki mine.

As anticipated, the company’s financial results for both the 2014 and 2013 Quarters were negatively impacted by losses related to White Oak’s development of its Mine No. 1. Since equity investment in White Oak entitles Alliance to receive substantially all distributions from White Oak until the contractual preferred return is achieved, Alliance currently reflects substantially all of White Oak’s income and losses in its financial results. Reported net equity in loss of affiliates of US$ 6.2 million for Q1 2014 and US$ 3.9 million for Q1 2013 was primarily due to the allocation of losses related to White Oak’s mine development activities.

Outlook

Commenting on the current outlook for Alliance over the rest of 2014, Craft said, “Based on the increased productivity experienced at Tunnel Ridge mine during the first quarter, we are now expecting 2014 full-year production from the mine of approximately 6.0 million t. In addition, as a result of the early start-up of our Gibson South mine, we are expecting this new operation to produce approximately 700,000 t this year. Increased coal volume expectations and additional sales commitments made during the first quarter gave us the confidence to increase 2014 full-year guidance."

Based on results to date and current estimates, the company anticipates coal production and sales volumes during 2014 in a range of 40.25 – 41 million t.


Adapted press release by Sam Dodson

Read the article online at: https://www.worldcoal.com/coal/29042014/alliance_resource_partners_announce_record_coal_production_770/

You might also like

EMI

Electrification in Mining virtual conference

Join us on 16 April 2024 for Global Mining Review's first Electrification in Mining event is an interactive virtual conference, focusing on electrification as the future of sustainable mining and exploring the innovative approaches and technologies being developed to facilitate its implementation.

Register for FREE »

 
 
 

Embed article link: (copy the HTML code below):