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 operating expenses.

• Adjusted EBITDA declined to $170.4 million, and oil & gas royalty volumes rose 11.9% year-over-year, though prices fell.

• Major capital and infrastructure projects are progressing, expected to improve productivity and cost structure in 2025.

• 2025 committed and priced sales tons increased by 5.9 million to 22.5 million, with sequential coal shipments and revenue improving.

Financial highlights

• Q3 2024 coal sales were $532.6 million, with coal sales volumes at 8.4 million tons, flat year-over-year, and production at 7.8 million tons, down 7.2%.

• Segment Adjusted EBITDA was $170.4 million, down from $227.6 million in the prior year; Segment Adjusted EBITDA margin was 31.4%.

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

• Q3 2024 free cash flow was $103.2 million; total liquidity at quarter end was $657.7 million, including $195.4 million in cash.

Outlook and guidance

• Full-year guidance for coal sales volumes, prices, and segment adjusted EBITDA expense per ton is maintained, but expectations are 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 target margin is 30%.

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

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