Shipments by segment
In 2Q16, all of the reportable coal mining segments of Westmoreland Coal (WLB) witnessed a decline in coal shipments both on a YoY (year-over-year) and QoQ (quarter-over-quarter) basis. Shipments from the company’s US coal mining operations came in at 4.7 million tons, as compared to 5.3 million tons during 2Q15 and 6.0 million tons in 1Q16. This decline represents a nearly 11% YoY drop.
Shipments from the company’s Canadian mining operations came in at 5.6 million tons, as compared to 5.9 million tons during 2Q15 and 5.8 million tons in 1Q16. This decline represents a nearly 5% drop YoY.
Shipments from Westmoreland Resource Partners’ (WMLP) Coal Mining segment witnessed the biggest drop in 2Q16. Shipments from this segment were down by nearly 19% from 2.1 million tons in 2Q15 to 1.7 million tons in 2Q16.
For 2Q16, Westmoreland Coal’s total coal (KOL) shipments came in at 12.0 million tons, as compared to 13.3 million in 2Q15 and 13.8 million tons in 1Q16—a nearly 10% YoY fall.
Why the fall?
The overall fall in coal shipments was mainly due to a significant drop in shipments from the company’s Coal-WLMP segment. According to company filings, the decrease in coal demand in Ohio resulted in lower tons delivered from this segment in 2Q16. Also, the expiration of certain coal shipment contracts in the US resulted in lower coal sales during 2Q16.
Hot summer weather conditions could help WLB’s coal sale volumes, as well as the volumes of peers Alliance Resource Partners (ARLP), Cloud Peak Energy (CLD), Peabody Energy (BTUUQ), Arch Coal (ACIIQ), and Alpha Natural Resources (ANRZQ).
In the next part, we’ll look at 2Q16 revenues from WLB’s operating segments.