Tuesday, January 30, 2024
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, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Fourth quarter and full year 2023 financial results. Alliance reported fourth-quarter EBITDA and earnings per unit (EPU) of $185.4 million and $0.88, respectively, compared to $296.9 million and $1.63 during the prior year period. We had forecast EBITDA and EPU of $226.6 million and $1.02. On a full year basis, Alliance generated EBITDA and EPU of $933.1 million and $4.81, respectively, compared to our estimates of $969.9 million and $4.95. Fourth quarter results were negatively impacted by lower Appalachia coal volumes due to reduced recoveries, fewer operating units at MC Mining, and challenging conditions that delayed development of a new longwall district at Alliance’s Mettiki operation. Operating expenses increased $20.4 million due to outside coal purchases and accounted for a portion of the variance to our earnings estimate.
Management guidance for 2024. Total coal sales are expected to be in the range of 34.0 million to 35.8 million tons, while the coal sales price per ton is expected to be in the range of $61.75 to $63.75. Segmented adjusted EBITDA expense per ton sold is expected to be $41.00 to $43.00. The company has committed and priced over 90% of 2024 expected coal sales volumes, or 32.5 million tons of which 4.1 million tons will be sold in the export market.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
