Alliance Resource Partners (ARLP) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $613.6 million, down 3.6% year-over-year, with net income at $86.3 million ($0.66 per unit), impacted by lower coal prices, weak export markets, and higher costs, especially in Appalachia.

• Coal sales shipments improved sequentially, with total shipments up 6.7% and domestic shipments up 11.9% from the previous quarter; inventory reduced by over 500,000 tons.

• Oil and gas royalty segment saw volumes rise 11.9% year-over-year, offset by lower commodity prices.

• Segment Adjusted EBITDA declined to $170.4 million, down from $227.6 million in the prior year period.

• For the nine months ended September 30, 2024, total revenues were $1.86 billion and net income was $344.5 million ($2.64 per unit), down from $514.7 million ($3.93 per unit) in the prior year.

Financial highlights

• Q3 2024 coal sales were $532.6 million, down 3.0% year-over-year, due to lower prices and slightly reduced volumes.

• Operating expenses for Q3 2024 rose to $512.5 million, mainly from higher per ton costs and a $15.3 million litigation accrual.

• Cash flow from operations was $209.3 million; capital expenditures were $110.3 million; quarterly distribution paid was $0.70 per unit.

• Segment Adjusted EBITDA for Q3 2024 was $170.4 million, down from $227.6 million in Q3 2023.

• Cash and cash equivalents at September 30, 2024, were $195.4 million.

Outlook and guidance

• Full-year guidance for coal sales volumes, prices, and expenses maintained, but expectations are now at the lower end for volumes/prices and higher end for costs.

• Projected 2024 coal sales: 33.5 million tons; 2025: 34.5 million tons; 2025 committed tonnage increased by 5.9 million tons.

• Two longwall moves rescheduled to Q1 2025, with only one remaining in Q4 2024.

• Maintenance capital expenditures for 2024 estimated at $7.76 per ton produced.

• Management anticipates sufficient cash flow to meet 2024 requirements, including capital expenditures, debt payments, and distributions.