Tuesday, October 29, 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.
Third quarter financial results. Alliance reported third quarter EBITDA and earnings per unit (EPU) of $170.7 million and $0.66, respectively, compared to $227.6 million and $1.18 during the prior year period. We had forecast adjusted EBITDA of $220.5 million and $0.82, respectively. Revenue declined 3.6% to $613.6 million because of lower coal sales prices which declined 2.1% due in part to lower export pricing in Appalachia. Operating expenses increased 13.5% due to a longwall move and challenging mining conditions at all three Appalachia operations that reduced recoveries and increased costs. The partnership also experienced a $2.3 million loss related to its equity investment in Francis Energy.
Adjusting estimates. We have lowered our 2024 EBITDA and EPU estimates to $760.1 million and $3.25, respectively, from $813.6 million and $3.60. Our estimates reflect lower coal sales and higher segment adjusted EBITDA expense per ton. Additionally, we have modestly lowered our 2025 EBITDA and EPU estimates to $831.7 million and $3.40, respectively, from $835.2 million and $3.43.
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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.
