Alliance Resource Lifts FY Guidance As It Wraps Up Remaining Stake In White Oak

(RTTNews) - Coal producer Alliance Resource Partners L.P. (ARLP) on Friday lifted its net income, revenue and production guidance for the full year 2015, citing mainly the acquisition of remaining equity stake in White Oak Resources LLC.

For the full year 2015, Alliance Resource now expects net income of $405 million to $435 million; revenues of $2.37 billion to $2.41 billion, excluding transportation revenues; and EBITDA of $765 million to $795 million.

Earlier, the company expected 2015 net income of $395 million to $455 million; revenues of $2.35 billion to $2.41 billion; and EBITDA of $765 million to $825 million.

Analysts expect the company to report earnings of $3.61 per share on revenues of $2.37 billion for 2015.

Further, for 2015, Alliance Resource now expects coal production of 42.8 million to 43.5 million tons and sales volumes of 42.7 million to 43.8 million tons. Previously, it projected production of 40.2 million to 41.2 million tons and sales of 40.75 million to 42.65 million tons.

The company said it now anticipates its average coal sales price per ton at the midpoint of its 2015 guidance ranges will be about 4% lower than 2014 realizations.

The company noted that while there will be modest accretion to earnings with the control of Mine No. 1, the year-to-date non-cash net equity in loss of affiliates related to its preferred equity investment in White Oak was larger than expected.

Further, Alliance Resource cut its capital expenditure guidance for 2015, now expecting a range of $270 million to $300 million, from prior guidance of $265 million to $285 million.

For its acquisition of the remaining stake in White Oak Resources LLC from White Oak Finance Inc and other parties, Alliance Resource paid $50 million cash at closing, with the possibility of additional contingent consideration in the future.

As a result of the deal, Alliance Resource now owns all of the equity interests in White Oak, coal reserves at Mine No. 1 that are leased to White Oak and the preparation plant and loading facilities at Mine No. 1.

With the closure of the deal, a subsidiary of Alliance Resource assumed operating control of the Hamilton County, Illinois-based White Oak Mine No. 1, which is currently producing high-sulfur coal at an annual rate of about 6 million tons.

Alliance Resource stock closed Friday at $24.62, down $0.42 or 1.68%, on the Nasdaq. In after hours, the stock dropped $0.75 or 3.05% at $23.87.