Westmoreland Coal Topped EBITDA Margin Growth in 1Q16

EBITDA (earnings before interest, tax, depreciation, and amortization) is an important metric used in understanding a company’s operational performance. Higher EBITDA implies higher income from ongoing operations.

For 1Q16, Cloud Peak Energy’s (CLD) adjusted EBITDA came in at -$0.4 million compared to $38.2 million in 1Q15. Arch Coal’s (ACIIQ) EBITDA came in at -$10 million compared to $81.8 million in 1Q15.

Peabody Energy’s (BTUUQ) 1Q16 adjusted EBITDA came in at $45.6 million compared to $166.9 million in 1Q15. Alpha Natural Resources (ARLP) reported its 1Q16 adjusted EBITDA as $135.7 million, down from $201.7 million in 1Q15.

Among the major coal mining companies, Westmoreland Coal (WLB) is the only company to report a YoY increase in adjusted EBITDA. WLB’s adjusted EBITDA in 1Q16 came in at $51.0 million compared to $41.8 million in 1Q15.

Of the major coal (KOL) mining companies, Westmoreland Coal is the only company to report positive growth in 1Q16 EBITDA margins. WLB’s EBITDA margins came in at 14.4% in 1Q16 compared to 11.2% in 1Q15. Arch Coal and Cloud Peak Energy reported negative EBITDA margins for 1Q16.

Cloud Peak Energy’s EBITDA margin dropped from 12.0% in 1Q15 to -0.2% in 1Q16. Arch Coal’s EBITDA margin dropped from 12.1% in 1Q15 to -2.3% in 1Q16.

Peabody Energy’s and Alliance Resource Partners 1Q16 EBITDA margins dropped by 6.5% and 3.1%, respectively, on a YoY basis.

According to Westmoreland Coal’s (WLB) company filings, the acquisition of San Juan Coal in January 2016 helped WLB to report higher adjusted EBITDA in 1Q16. The San Juan Coal acquisition contributed about $7.7 million in adjusted EBITDA during 1Q16.

Next, we’ll look at the bottom lines of the major coal mining companies in 1Q16.