Behind Arch Coal’s Shipments and Revenues
Arch Coal’s shipments
Arch Coal (ARCH) reported shipments of 92.8 million tons in 2016, which represents a 25.9% fall from 125.2 million tons in 2015 and a 28.9% fall from 130.5 million tons in 2014. From October 2 to December 31, 2016, after Arch Coal emerged from Chapter 11 bankruptcy, the company’s shipments totaled 26.8 million tons.
This mix consisted of 81% from Powder River Basin, 9% from the Metallurgical segment, and 10% from the Other Thermal segment. The period from January 1 to October 1, 2016, posted 67.1 million tons of shipment. The shipments in 1H17 totaled 48.2 million tons.
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In 2014, railroad performance issues negatively impacted Powder River Basin shipments. This impact was partially offset by increased shipments from the Appalachia region (currently the Metallurgical segment after the restructuring).
Arch Coal’s revenues
Arch Coal’s revenues are mainly driven by its mines operated in the Powder River Basin and Appalachia regions. In 2016, ~69.2% of total revenues came from the Powder River Basin, and ~28.2% of total revenues came from the Appalachia region. In 1H17, ARCH’s revenues totaled $1.2 billion, and its revenues totaled $575 million from October 2 to December 31, 2016.
The company posted $2.6 billion in revenues in 2015, which lower than its 2014 revenues $2.9 billion, primarily due to lower shipments from the Metallurgical, Powder River Basin, and Other Thermal segments.
Heating demand during the winter, higher natural gas prices, and changes in environmental regulations by the Trump administration are all likely to be driving factors for coal (KOL) producers like Alliance Resource Partners (ARLP), Alpha Natural Resources (ANRZQ), Peabody Energy (BTU), and others in these regions.
Next, we’ll look at Arch Coal’s operating performance.