Westmoreland Coal (NasdaqGM: WLB) reported Oct. 25 that its third quarter 2013 revenues grew 9.6% to $176.8m compared with $161.3 million in Q3 2012.
Adjusted EBITDA for the twelve months ended Sept. 30 increased 30.3% to $115.8m compared with $88.8m for the twelve months ended Sept. 30, 2012. Third quarter 2013 Adjusted EBITDA was $30.1m compared with $35.5m for the year-ago quarter.
Net loss applicable to common shareholders for the nine months ended Sept. 30 decreased to $0.9m compared with a loss of $4.6m for the nine months ended Sept. 30, 2012.
“During the third quarter, favorable weather and low hydro generation continued to generate high demand for power. Our customers ran their plants at high levels and Westmoreland’s mines and plants operated very well, producing $30.1 million in Adjusted EBITDA for the quarter. We view this level of Adjusted EBITDA as very good considering impacts from the Colstrip Unit 4 outage on Rosebud sales,” said Robert King, Westmoreland’s Chief Executive Officer.
Westmoreland’s Rosebud strip mine is the captive supplier to the adjacent Colstrip power plant in Montana, which is operated by PPL Montana. On July 1, Colstrip Unit 4, a 740-MW (net) coal unit, tripped off-line. Damage to the stator/rotor assembly was evident. The unit at that point was expected to be offline for roughly six months.
“Based upon our current projections we have narrowed the range of our previously announced Adjusted EBITDA guidance to $115-$119 million,” King added. “We expect capital expenditures for the year to be $25-$27 million.”
Westmoreland’s revenues in Q3 2013 increased to $176.8m compared with $161.3m in Q3 2012. Net income to common shareholders decreased by $4.9m, from $7.3m in Q3 2012 to $2.4m in Q3 2013.
Revenues increased primarily due to stronger power demand, favorable weather conditions, and fewer unplanned outages at the ROVA coal-fired power plant in North Carolina. Adjusted EBITDA decreased mostly due to increased costs incurred at the Absaloka mine in Montana in preparation for higher production levels, primarily in anticipation of resumed operations at the coal-fired Sherco Unit 3 in Minnesota; coal mined at the Kemmerer mine carried a higher royalty rate; and a contract adjustment related to employee benefit costs.
The 884-MW Sherburne County (Sherco) Unit 3 is a major customer for Absaloka and was recently brought back online by Xcel Energy after nearly two years of repair work following a mechanical failure in November 2011. The smaller Sherco Units 1 and 2 had kept running during that period.
Westmoreland sold 6.6 million tons of coal in the third quarter, against sale of 6 million tons in the year-ago quarter. Westmoreland’s third quarter 2013 coal segment revenues and tons sold increased due to stronger power demand and favorable weather conditions.
Westmoreland Coal is the oldest independent coal company in the U.S. Its operations include sub-bituminous coal mining in the Powder River Basin in Montana and Wyoming, and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina.