Alliance Resource Partners reports records for tons produced, tons sold and revenues for the year ended Dec. 31.
ARLP announces the directors of its managing general partner increased the cash distribution to unitholders for the quarter ended Dec. 31 to 71.5 cents per unit, or an annualized rate of $2.86 per unit, payable on Feb. 13 to all unitholders of record as of the close of trading on Feb. 6.
The announced distribution represents a 22.2 percent increase over the cash distribution of 58.5 cents for the quarter ended Dec. 31, 2007, and a 2.1 percent increase over the third quarter 2008 cash distribution of 70 cents per unit.
For the eighth consecutive year, ARLP posted new records for coal sales, production volumes and revenues,” said Joseph W. Craft III, president and chief executive.
“With a solid customer base, substantial coal supply commitment levels, visible cash flow growth and ample liquidity, ARLP is well positioned to build on this strong performance in 2009,” Craft said. “The depth of the economic decline and the resulting impact on coal demand and prices has been greater than we previously anticipated. It now appears ARLP’s coal price realizations for 2009 and beyond will be lower than previously expected.”
“In this environment,” Craft said, “the Board believes the most prudent course of action is to temporarily moderate management’s previously stated goals for unitholder distribution growth. We will continue to monitor the markets and economy and, as circumstances warrant, will be prepared to reassess our views in the coming quarters. Although we are faced with challenges and uncertainty, ARLP continues to anticipate significant cash flow growth in 2009 and beyond and remains committed to its long-stated objective of providing our unitholders with one of the highest distribution growth rates while maintaining one of the strongest distribution coverage ratios in the MLP sector.”
After normalizing for the non-recurring synfuel benefits realized in 2007, ARLP also reported record EBITDA for the 2008 period.
ARLP reported net income of $25.2 million, or 32 cents of net income per limited partner unit, compared to net income of $39.9 million, or 76 cents of net income per limited partner unit, for the 2007 quarter. EBITDA for the 2008 quarter was $62.8 million, compared to EBITDA of $64.6 million in the 2007 quarter.
Comparative results for the 2008 quarter reflect the loss of synfuel-related benefits realized in the 2007 quarter of approximately $3.6 million and $3.8 million for net income and EBITDA, respectively.
Revenues for the 2008 quarter increased 23.2 cents to a record $310.9 million, compared to $252.4 million for the 2007 quarter. Increased revenues in the 2008 quarter were primarily due to a record average coal sales price of $42.15 per ton sold as well as higher coal sales volumes, which rose 15.1 percent to 7 million tons. Other sales and operating revenues increased slightly in the 2008 quarter despite the loss of $3.3 million in synfuel-related other operating revenues realized in the 2007 quarter.
Operating expenses in the 2008 quarter increased to $218.6 million, compared to $163.3 million in the 2007 quarter, primarily as a result of higher coal production and sales volumes as well as increased labor and labor-related expenses, materials and supply costs, maintenance costs, and regulatory compliance costs.