CNX Coal Resources LP has reported financial and operating results for the quarter ended 31 December 2015.
The company’s cash distribution was US$0.5125 per unit. Net income finished at US$8.7 million and distributable cash flow1 at US$9.8 million. Adjusted EBITDA came in at US$18.7 million.
CNXC saw coal sales of 1.0 million short t for 4Q15 and 2016 contracted sales position at 4.8 million short t.
“Overall, the fourth quarter was very challenging for CNXC, as an unusually warm start to winter and low natural gas prices reduced the demand for coal generation and resulted in significant inventory overbuild at coal plants. While we worked with our customers to manage the inventory levels, it impacted our fourth quarter shipments and plans for coal sales in the first quarter of 2016,” explained Jimmy Brock, CEO of CNX Coal Resources GP LLC. “Our operations team continues to manage through these challenging coal markets by making necessary adjustments at the mines to control costs and offset some of the pricing pressure.
“I am very pleased to report that during the fourth quarter of 2015, the company’s Bailey mine was awarded the 2015 Keystone Mine Safety Award for the second consecutive year in the longwall mine category. Furthermore, for the year ended December 31, 2015, recordable accidents and severity of incidents were reduced by 33% and 75%, respectively compared to the year earlier period at the Pennsylvania mining complex.”
“Adjusted EBITDA” and “Distributable Cash Flow” are non-GAAP financial measures, which are reconciled to GAAP net income and net cash provided by operating activities, under the caption “Non-GAAP Financial Measures.”
For its 20% undivided interest in the Pennsylvania mining complex, CNXC sold 1.0 million short t of coal during the 4Q15. Total production declined to 0.9 million short t compared to 1.3 million short t produced in 4Q14 as CNXC aligned production with market conditions.
The company’s total unit costs for coal sold in the quarter were US$39.84/short t, compared to US$42.77/short t in the year-earlier quarter. The improved cost performance was driven by reduced expenses related to the Pennsylvania streams subsidence, partially offset by lower production due to inconsistent shipment schedules.
CNXC ‘s guidance for coal sales in 2016 is 4.4-5.2 million short t, Adjusted EBITDA of US$57 – US$67 million and maintenance capital expenditures of US$24.5 – US$27.5 million.
Edited from press release by Harleigh Hobbs
