Compared to the other coal companies, ARLP's results were extremely disappointing. They got no increase in coal prices in the Illinois basin, very little increase in other areas. Both BTU and ACI did far better. Apparently, our management doesn't know how to cut it.
In light of this, I am far less bullish then I was.
I agree. Several months ago, there was a discussion on this board about ARLP's contract pricing and whether it would get market prices for its coal. The company doesn't give much detail, but said something like "the vast majority" of its sales are related to market prices (most sales are under long-term contracts). Doesn't look like the relationship is all that close.
I can only suggest that if anyone still likes ARLP, it makes much more sense to buy AHGP, the general partner. AHGP's yield is now 5.85%, while ARLP is 5.95%. With the next distribution increase, you will be getting a higher yield on the GP rather than the LP units, which is crazy.
i have to disagree. In an economy like this, and, equities beat up as they are, how can you not like a company that beats top line, raises dividend, declares future dividend increases, and, notes that '09 and '10 coal sale prices per ton will be up 25% and 50% respec...?????
BTU and ACI are in the same business and the report bangup numbers. If you read their reports their are several startling things that hit you. For example, the average price per ton of appalachian coal for ACI is over $69/ton. For ARLP, it is a little over $60/ton. Why this $9/ton discrepancy? Why cannot ARLP get the same prices? Spot prices are through the roof and, yet, ARLP's Illinois basin coal selling price did not increase at all. Both ACI's and BTU's went up.
All we get is this lame excuse about synfuel. Hey, I just want them to be able to sell their coal at the same price their competitors do.