Alliance Resource Partners (ARLP) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues were $540.5 million, down 17.1% year-over-year, with net income at $74.0 million, reflecting lower coal sales volumes and prices, but sequential improvement from Q4 2024.

• Adjusted EBITDA for Q1 2025 was $159.9 million, down from $238.4 million year-over-year but up $36.0 million sequentially.

• Over 96% of 2025 expected coal sales volumes are committed and priced, with 17.7 million tons of new contract commitments added for 2025–2028.

• Domestic coal demand strengthened due to cold winter weather, higher natural gas prices, and increased electricity demand forecasts.

• Recent U.S. policy actions, including executive orders to support coal-fired generation and grid reliability, are expected to extend the life of coal plants and support long-term demand.

Financial highlights

• Coal sales revenue dropped 16.6% year-over-year to $468.5 million due to a 10.4% decrease in tons sold and a 6.9% decrease in average coal sales price.

• Net income attributable to ARLP fell 53.2% to $74.0 million ($0.57 per unit) from $158.1 million ($1.21 per unit) in Q1 2024, impacted by lower sales and a $5.6 million decrease in digital asset fair value.

• Adjusted EBITDA for Q1 2025 was $159.9 million, down from $238.4 million year-over-year but up 29.0% sequentially.

• Free cash flow was $52.7 million after $83.4 million invested in coal operations; distributable cash flow was $84.1 million.

• Quarterly distribution declared at $0.70 per unit, annualized at $2.80 per unit, unchanged from prior periods.

Outlook and guidance

• Full-year 2025 coal sales guidance raised, with 32.75–34.75 million tons committed and 96% of 2025 production contracted.

• Second quarter 2025 coal sales volumes expected to be 8%-12% higher than Q1; cost per ton anticipated to decline in the second half.

• Full-year segment-adjusted EBITDA expense per ton guided at $35.00-$38.00 in Illinois Basin and $53.00-$60.00 in Appalachia.

• Capital expenditures for 2025 expected at $285-$320 million, down from $429 million in 2024 as major mine investments near completion.

• 2026 average coal sales price per ton anticipated to be 4%-5% below 2025 midpoint, with cost savings targeted to maintain margins.