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Why Westmoreland Coal Had Higher Coal Pricing Growth in 3Q16

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3Q16 coal pricing

The majority of coal (KOL) mining companies witnessed negative coal pricing growth on a YoY (year-over-year) basis in 3Q16. However, Westmoreland Coal (WLB) and Arch Coal (ARCH) witnessed an improvement in average coal sales price per ton sold on a YoY basis when compared to its peers.

For 3Q16, Westmoreland Coal’s (WLB) average coal sales price per ton came in at $25.60 compared to $24.20 in 3Q15. Pure play PRB (Powder River Basin) coal miner Cloud Peak Energy (CLD) reported its 3Q16 average coal sales price per ton at $12.50 compared to $12.80 in 3Q15.

 

Alliance Resource Partners (ARLP) reported a drop in coal pricing from $53.20 per ton sold in 3Q15 to $49.60 per ton in 3Q16. Industry major Peabody Energy’s (BTUUQ) 3Q16 coal pricing fell marginally from $23.80 per ton sold in 3Q15 to $23.20 per ton in 3Q16.

Arch Coal’s average realized price per ton of coal sold in 3Q16 came in at $20.00 per ton compared to $19.80 per ton during the same period in 2015.

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Coal pricing growth

Among the major coal companies, Westmoreland Coal’s coal pricing saw a major increase compared to its peers. The company witnessed an ~6% increase in coal pricing on a YoY basis. Arch Coal’s coal pricing improved nearly 1% during the same period.

Among the other major coal mining companies, Peabody Energy, Cloud Peak Energy, and Alliance Resource Partners saw a drop in their realized coal prices per ton on a YoY basis.

What helped Westmoreland Coal?

The San Juan acquisition continued its contribution to Westmoreland’s top-line growth since its acquisition in 1Q16. It added about $51.7 million in revenues and about $14 million in operating income for 3Q16. Also, higher revenue realized per ton of coal sold from the company’s Canadian mining operations improved its average coal pricing on a YoY basis.

In the next part of this series, we’ll compare revenue growth rate of major coal companies for 3Q16.

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