Westmoreland Coal Company (NASDAQ:WLB)
Westmoreland Coal Company (NASDAQ:WLB) has announced its financial results for Q1 of the 2017 financial year. In a statement, the company’s Chief Executive Officer Kevin Paprzycki said the company is fully committed to achieving its full year guidance despite having a lot of challenges in Q1. He added that lower demand in Q1 negatively impacted the company’s cash flow and adjusted EBITDA.
Westmoreland Coal Company (NASDAQ:WLB) reported $88.2 million in adjusted EBITDA for the Q1 of the 2017 financial year. The company reported lower revenue from the Coal-US segment as a result of the Beulah and Jewett coal supply contract expirations. Unfavorable weather conditions also adversely affected operating segments, especially Coal–WMLP where bad weather in Ohio further led to decline in demand and price. Heavy rains and snowfall at the Kemmerer mine lowered demand in the first quarter and led to an increase in costs.
Westmoreland Coal Company (NASDAQ:WLB) encountered operational challenges like dragline repairs in Canada as well as temporary mining in a low-yield zone of some mines in both Coal–WMLP and Coal–Canada sectors. This led to low levels of sales in addition to increasing costs. These declines were offset by a loan repayment by Capital Power out of which $47 million. The company’s Adjusted EBITDA was also boosted by an extension of operations in San Juan as compared to the previous year.
Westmoreland Coal Company (NASDAQ:WLB) reported $42.6 million in free cash flow. This included benefit from the loans collected. In this case free cash flow refers to the net cash flow that the company used in $0.7 million operation less the $7.2 million capital expenditures, plus the $50.5 million in loans and lease receivable that the company collected. Also included in the cash flow from the company’s operations were $32 million in interest expenditures towards an asset retirement commitment of $10.7 million plus a negative working capital amounting to $3.2 million.
At the close of Q1 of 2017, Westmoreland Coal Company (NASDAQ:WLB) had $75.4 million in cash and cash equivalents. This is compared to the $15.4 in cash and cash equivalents that the company had during the same period the previous financial year. The increase is attributed to the $42.6 million worth of free cash flow generation, a $22.4 million reduction of net cash debt plus the $3.6 million in reserve acquisition. The $1.2 million in non-operating cash uses also contributed to this increase.
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About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.