Units of Alliance Resource Partners LP (NASDAQ:ARLP) dropped over 18% today. There wasn't any company-specific news, but the S&P 500 receded 2% as investors continue to assess the economic damage of the coronavirus pandemic.
The coal producer has provided multiple updates to investors in the last month. As of the latest update, initial full-year 2020 guidance has been rescinded, distribution payouts have been halted, and total production this year will be reduced to meet contract volumes.
As of 3:07 p.m. EDT, the dividend stock had settled to a 15.3% loss. Shares have fallen 65% since the beginning of 2020.
Alliance Resource Partners is a well-run business with healthy profit margins. But roughly 95% of full-year 2019 revenue was generated from supplying and transporting coal. The unprecedented shift away from coal-fired power plants in the United States and volatility in export markets has reduced the company's market opportunity in recent years.
The coronavirus pandemic is only the latest headwind. The United States has experienced a significant decline in electricity consumption since mid-March as orders to stay indoors have led to steep declines in commercial power demand. That trend is likely to continue through May, although it could take months or longer for a recovery in consumption to materialize.
That's forced Alliance Resource Partners to curtail operations to keep employees safe and meet supply obligations. Production at the company's Illinois Basin mines has been suspended through at least April 26, while production in Kentucky has been halted until a new site opens in early May.
The partnership said it will provide a status update when it reports first-quarter 2020 operating results in the coming weeks. Until more details are known, investors can assume the company's operations have been significantly impacted by the coronavirus pandemic.