Alliance said net income was 8.9% higher at US$399 million in 2019, compared with $367 million in 2018, boosted in part by the January 2019 acquisition of AllDale Minerals for its portfolio of revenue-earning oil and gas royalties.
However, it also released its consolidated guidance for 2020, expecting net income in a range of $81-$159 million. Full-year 2019 consolidated revenue came in at $2 billion, with 2020 guidance for $1.65-$1.77 billion.
The Tulsa, Oklahoma-based company said despite its "continued profitability" and "solid" cash generation during 2019, the board had chosen to protect its "strong" balance sheet and take advantage of opportunities by preserving liquidity and maintaining access to capital.
The quarterly dividend has been cut from 54c to 40c.
Alliance said it anticipated "challenging" coal market conditions to persist throughout 2020 as low natural gas prices, tepid power demand and elevated stockpiles were likely to keep the industry in an oversupplied position and continue to "exert pressure" on pricing for the near future.
For the full year 2019, adjusted EBITDA fell 7.5% to $599 million.
Alliance, which currently operates eight mining complexes in the Illinois Basin and Appalachia, said its December-quarter results weighed on the full-year picture, with revenues down 15% year-on-year to $453.3 million. This was attributable to lower coal sales resulting from reduced coal sales volumes and prices, partially offset by the addition of oil and gas royalty revenues.
Net income attributable to shareholders folded in half to $25.8 million in the quarter, while the adjusted-EBITDA figure came in at $126.2 million, down 29% compared with $176.8 million a year earlier.
Moody's Investor Services VP, senior credit officer and lead coal analyst Benjamin Nelson said in a note Alliance's earnings held up "fairly well" despite difficult market conditions in the December quarter.
"The company is well-positioned with a strong balance sheet. Alliance expects to improve market share in a declining market in 2020, which does not bode well for weaker competitors and coal pricing," Nelson said.
Alliance shares (NASDAQ:ARLP) has seen a near linear slide in value over the past 12 months, losing more than half its value to a new low of $8.99 on Monday, as opposed to the high of $20.78 early last year. The company has a market value of $1.2 billion.
