Wednesday, February 01, 2023
ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Another stellar quarter. Alliance reported fourth quarter EBITDA and earnings per unit (EPU) of $293.9 million and $1.63, respectively, compared to $130.2 million and $0.40 during the prior year period. We had forecast net income and EPU of $272.8 million and $1.42. The partnership’s coal and oil & gas royalties segments performed stronger than expected due to higher volumes and commodity prices.
Updating estimates. We have increased our 2023 EBITDA and earnings per unit estimates to $1.18 billion and $5.90, respectively, from $1.12 billion and $5.85. Based on contracted coal sales volumes in 2023 and 2024, the outlook for cash flow growth appears favorable. Within the oil and gas royalty segment, volumes are expected to benefit from recent acquisitions, including the purchase of 2,682 net oil and gas royalty acres in the Permian Basin which is expected to close shortly with an effective date of January 1, 2023.
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