Tag: Thermal Coal

Alliance Resource Partners (ARLP) – Opportunity Knocks

Posted on by cpereira@noblefcm.com


Thursday, December 21, 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, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Presentation at NobleCon19. During Noble’s recent investor conference, Mr. Cary Marshall, Senior Vice President and CFO, provided a corporate overview and participated in an economic perspectives panel moderated by Emmy award winning reporter Michael Williams. Mr. Marshall highlighted how Alliance is well positioned to benefit from the electrification of the U.S. economy. He noted that while U.S. total electricity generation grew by 0.5 trillion kilowatt hours during the period 2000 to 2020, the U.S. Energy Information Administration forecasts total generation growth of 1.3 trillion kilowatt hours between 2023 to 2050. Growth in electric vehicles, onshoring of U.S. manufacturing, data center growth, and use of computer applications are expected to provide a boost in demand for electricity.

A forward-thinking diversified energy company. While Alliance’s coal business generates the largest share of the partnership’s revenue and EBITDA, investors may underappreciate the fact that ARLP is evolving into a more diversified company. Since 2014, the company has invested a total of $705 million to grow its oil & gas royalty business and has also invested in businesses that position it to evolve with the needs of the market, including Infinitum (electric motor technology), Ascend Elements (battery metals recycling), and Matrix Design Group, a wholly owned subsidiary that provides mining and industrial technology solutions.


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*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. 

Alliance Resource Partners (ARLP) – Refining Estimates; Outlook Remains Favorable

Posted on by cpereira@noblefcm.com


Wednesday, November 15, 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, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Refining estimates. We have increased our 2023 EBITDA and EPU estimates to $4.96 and $975.2 million from $966.2 million and $4.89. We decided to increase our total coal sales estimates which are now at the midpoint of guidance instead of at the low end. We also modestly increased our coal sales price per ton estimate to $65.15 from $65.00 but still within the guidance range of $64.50 to $66.00. We have lowered our 2024 EBITDA and EPU estimates to $998.1 million and $5.05 from $1.0 billion and $5.15 based on modestly lower commodity prices.

Why the revisions? Alliance has committed and priced 35.0 million tons in 2023, including 29.7 million tons in the domestic market and 5.3 million tonnes in export markets. While a portion of higher priced export volumes could be deferred into 2024, we think our previous estimate was too conservative. As part of our review, we also adjusted quarterly and full year 2024 estimates and refined both years’ estimates associated with equity method investments.


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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. 

Alliance Resource Partners (ARLP) – Third Quarter Negatively Impacted by Lower Coal Sales Volume and Higher Costs

Posted on by cpereira@noblefcm.com


Monday, October 30, 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, 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 $227.6 million and $1.18, respectively, compared to $253.8 million and $1.25 during the prior year period. We had forecast EBITDA and EPU of $240.3 million and $1.20. Revenue increased 0.6% to $636.5 million, while income from operations declined 8.7% to $165.4 million. The company generated free cash flow of $123.7 million and distributable cash flow provided quarterly cash distribution coverage of 1.75x. Third quarter financial results were negatively impacted by lower coal sales volumes and higher costs at its coal operations in Appalachia.

Refined management guidance. Alliance provided updated guidance for the remainder of the year which we have incorporated into our estimates as detailed in the body of this note. Total coal sales are expected to be in the range of 34.5 million to 35.0 million tons compared to previous expectations of 35.5 million to 36.0 million tons, while the coal sales price per ton is expected to be in the range of $64.50 to $66.00 compared to previous guidance of $65.00 to $66.00. Segmented adjusted EBITDA expense per ton sold is expected to be $39.50 to $40.50 compared to previous guidance of $38.00 to $41.00.


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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. 

Alliance Resource Partners (ARLP) – Gaining a Toehold in the EV Battery Market

Posted on by cpereira@noblefcm.com


Thursday, September 07, 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, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Strategic investment. Alliance invested $25 million in Ascend Elements, Inc., a U.S.-based manufacturer of sustainable, engineered battery materials for electric vehicles. The investment was part of a $460 million Series D funding round which, combined with $480 million in grants awarded by the Department of Energy and $82 million of earlier investments, will advance construction of a commercial-scale facility in Kentucky using a patented process known as hydro-to-cathode direct precursor synthesis to manufacture NMC cathode precursor material (pCAM) and cathode active material (CAM) recovered from used lithium-ion batteries and battery gigafactory manufacturing scrap for use in electric vehicle batteries.

Project is supported by a multi-year supply agreement. The manufacturing facility will produce enough cathode material for 750,000 electric vehicles per year. Ascend Elements recently executed a multi-year contract to supply approximately $1 billion worth of sustainable pCAM for use in a major U.S. company’s battery manufacturing process beginning in the fourth quarter of 2024. The customer has the option to expand the contract to a larger quantity with a value of up to $5 billion.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

Alliance Resource Partners (ARLP) – In-Line Second Quarter; Lowering Near-Term Estimates

Posted on by cpereira@noblefcm.com


Wednesday, August 02, 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, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second quarter financial results. Alliance reported second quarter EBITDA and earnings per unit (EPU) of $249.2 million and $1.30, respectively, compared to $246.9 million and $1.23 during the prior year period. EPU was in line with our estimate and was modestly ahead of the consensus. We had forecast EBITDA and EPU of $254.4 million and $1.30. Revenue increased 3.5% to $641.8 million, while income from operations increased 3.7% to $183.9 million. The company generated free cash flow of $153.5 million compared to $81.3 million during the prior year period and distributable cash flow provided quarterly cash distribution coverage of 1.9x.

Refined management guidance. Alliance provided updated guidance for the remainder of the year which we have incorporated into our estimates as detailed in the body of this note. Total coal sales are expected to be in the range of 35.5 million to 36.0 million tons compared to previous expectations of 36.0 million to 38.0 million tons, while the coal sales price per ton is expected to be in the range of $65 to $66 compared to previous guidance of $65 to $67. Alliance also guided to lower depreciation, depletion, and amortization, general and administrative, and income tax expense.


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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. 

Alliance Resource Partners (ARLP) – Evolving into a Diversified Energy Company

Posted on by cpereira@noblefcm.com


Thursday, July 13, 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, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Refining estimates. While our 2023 EBITDA and EPU estimates are largely unchanged, we have made some quarterly adjustments lowering our second quarter EPU estimate to $1.30 from $1.35 and increasing our fourth quarter EPU estimate to $1.40 from $1.35. We have increased our coal sales volumes in the fourth quarter and modestly reduced our coal volumes and revenue per ton in the second quarter due in part to lower coal export prices during the second quarter which we think will strengthen during the second half. Second quarter crude oil prices were modestly lower than our estimates while natural gas prices were higher. We have trimmed our 2024 EBITDA and EPS estimates to $1.10 billion and $5.65 from $1.11 billion and $5.70, respectively, to reflect modestly lower coal volumes and prices compared to previous estimates.

Strong cash flow facilitates debt reduction. On July 25, Alliance will redeem $50.0 million of its 7.5% senior notes due 2025, representing 14.7% of the $339.2 million in aggregate notes outstanding. In March, the partnership purchased $26.6 million of its outstanding 2025 senior notes in the open market slightly below par. Alliance can call all or any part of its senior notes at par value and management intends to prioritize purchases with available cash flows in 2023 and 2024.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

Alliance Resource Partners (ARLP) – A Harbinger of Things to Come?

Posted on by cpereira@noblefcm.com


Monday, January 30, 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.

Quarterly cash distribution increased 40%. For the December 2022 quarter, ARLP unit holders will receive a cash distribution of $0.70 per unit, or $2.80 on an annualized basis, payable on February 14, 2023 to unit holders of record as of the February 7, 2023 close. The announced distribution represents a 180% increase over the cash distribution of $0.25 per unit for the quarter ended December 31, 2021 and a 40% increase over the cash distribution of $0.50 per unit for the quarter ended September 30, 2022. We had assumed the quarterly cash distribution would be increased to $0.55.

Fourth quarter and full year 2022 financial results. ARLP will report financial results for the fourth quarter and full year 2022 before the market opens on Monday, January 30, 2023. Management will host a conference call for investors at 10:00 am ET on the same day.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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.