Westmoreland Announces 2015 Guidance
February 11 2015 - 7:00AM
Business Wire
Westmoreland Coal Company (NasdaqGM: WLB, “Westmoreland”) today
announced guidance on key financial metrics for 2015. The guidance
represents the consolidated projections of Westmoreland Coal
Company and Westmoreland Resource Partners, LP (NYSE: WMLP), as
detailed in the table contained herein. The consolidated 2015
projections are based on the below key assumptions and guidance
ranges.
- Production is projected to be between
56.0 and 60.0 million tons
- Consolidated 2015 Adjusted EBITDA is
projected to be between $235.0 and $270.0 million
- Consolidated capital expenditures are
projected to be between $74.0 and $92.0 million
- Included in our guidance is $7.5
million of capital expenditures in Canada related to the expansion
of the activated carbon facility, which is currently projected to
come online in 2017.
- Distributable Cash Flow of WMLP is
estimated to be between $6.1 and $6.6 million. As previously
announced, WMLP intends to resume quarterly distributions of $0.20
per unit beginning in April 2015, or $5.0 million annually. Based
on its 77% current ownership, Westmoreland expects to receive
approximately $3.9 million of WMLP’s distributions.
“We see customer demand across our entire business being at
historical levels in 2015. Our low cost mine mouth model allows us
to deliver coal to our customers at prices significantly below
natural gas equivalents, even at today’s gas prices,” noted Keith
E. Alessi, Westmoreland’s Chief Executive Officer. “Furthermore,
the regulated power markets that most of our Canadian customers
operate in provide additional protection as they are assured
dispatch under purchase power arrangements. The predictable nature
of our business model enables us to project positive cash flow
generation.”
“2014 was a busy year for Westmoreland. We successfully
integrated the Canadian acquisition and realized significant
savings,” noted Mr. Alessi. “Unfortunately, these improvements were
offset by year-on-year decreases in the value of the Canadian
dollar and PJM power prices. We have reduced production levels and
costs at the Coal Valley export mine that should allow us to
mitigate the effects of a weak export market. ROVA also largely
benefitted in early 2014 from the impact severe winter weather
conditions had on power prices.”
Discussing the 2015 guidance, Mr. Alessi noted that “the 2015
guidance we are providing reflects a CDN$:US$ exchange rate of
$0.80, current Newcastle coal pricing of US $65.00/metric ton, and
average 2015 PJM power prices of approximately $45.00 per MW.
Included in our guidance is $7.5 million of capital expenditures in
Canada related to the expansion of the activated carbon facility,
which is currently projected to come online in 2017. We have
historically adjusted capital expenditures during the year, as
needed, to reflect changes in business conditions and we will
continue to do so this year.”
“We closed on the Oxford transaction on the last day of 2014 and
we have begun integration of that operation with a focus on cost
controls, efficiencies and distributable cash flow. Our 2015
guidance reflects the current business configuration. As we have
discussed previously, we anticipate beginning a drop down strategy
from WLB to WMLP during 2015. The impact of any drop downs that
will occur during 2015 is not reflected in our current guidance. I
would anticipate a drop down in the second or third quarter and we
will adjust guidance accordingly at such time.”
“We will continue to remain focused on our core competency of
safe, stable, low cost production,” said Mr. Alessi. “I look
forward to discussing this guidance further on our 2014 earnings
release and investor call on February 27, 2015.”
Guidance Summary, in millions
WLB
WMLP
Total
Low High Low
High Low
High
Tons
52.5 56.0 3.5
4.0 56.0
60.0
Adjusted EBITDA
$200.0 $230.0
$35.0 $40.0 $235.0
$270.0
Capital
Expenditures $66.0 $82.0
$8.0 $10.0
$74.0 $92.0
Per ton
$1.26
$1.46
$2.29
$2.50
$1.32
$1.53
Cash Reclamation spend
$4.5
$7.0
Cash
Interest
$16.4 $16.4
Distributable Cash Flow
$6.1 $6.6
Pro Forma Distributions
$5.0
$5.0
Pro Forma Cash Flow
after Distribution
$1.1 $1.6
Pro Forma Coverage Ratio
1.22
1.32
About Westmoreland Coal Company
Westmoreland Coal Company is the oldest independent coal company
in the United States. Westmoreland’s coal operations include
sub-bituminous and lignite surface coal mining in the Western
United States and Canada, an underground bituminous coal mine in
Ohio, a char production facility, and a 50% interest in an
activated carbon plant. Westmoreland also owns the general partner
of and a majority interest in Westmoreland Resource Partners, LP,
formerly Oxford Resource Partners, LP, a publicly-traded coal
master limited partnership. Its power operations include ownership
of the two-unit ROVA coal-fired power plant in North Carolina. For
more information, visit www.westmoreland.com.
Cautionary Note Regarding Forward-Looking Statements
This release may contain “forward-looking statements.”
Forward-looking statements can be identified by words such as
“anticipates,” “intends,” “plans,” “seeks,” “believes,”
“estimates,” “expects” and similar references to future periods.
These statements involve known and unknown risks, which may cause
actual results to differ materially from results expressed or
implied by the forward-looking statements. These forward-looking
statements are based on Westmoreland’s current expectations and
beliefs concerning future developments and their potential effect
on the company. These forward-looking statements and other
information are based on Westmoreland’s beliefs as well as
assumptions made by it using information currently available. Such
statements reflect Westmoreland’s current views with respect to
future events and are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as
anticipated, believed, estimated, expected or intended.
Westmoreland is making investors aware that such forward-looking
statements, because they relate to future events, are by their very
nature subject to many important factors that could cause actual
results to differ materially from those contemplated. Such factors
include, but are not limited to, the risks that are described under
the heading “Risk Factors” in Westmoreland’s Annual Report on Form
10-K for the year ended December 31, 2013 and other filings with
the Securities and Exchange Commission. You are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date of this press release. Westmoreland undertakes
no obligation to publicly update or revise any forward-looking
statements after the date they are made, whether as a result of new
information, future events or otherwise.
Westmoreland Coal CompanyKevin Paprzycki, 855-922-6463