Hallador Energy Company (HNRG) Q2 2026 earnings summary

Executive summary

• The company reported a net loss of $15.2 million for Q2 2026, impacted by scheduled and unplanned outages at Merom and higher maintenance and purchased power costs, compared to net income of $8.2 million in Q2 2025.

• The Turtle Creek Gas project, a 460 MW natural gas-fired plant, advanced with its budget reduced below $800 million and commercial operation targeted for the second half of 2028.

• Forward contracted sales reached $2.4 billion at the segment level, providing strong revenue visibility through 2040.

• Major reliability upgrades were completed at Merom, expected to improve future performance.

• Coal operations revenue increased 11.7% in Q2, driven by higher volumes and prices, though segment EBITDA declined due to higher costs.

Financial highlights

• Q2 2026 operating revenue was $101.5 million, down from $102.8 million year-over-year, mainly due to lower delivered energy sales.

• Net loss for Q2 2026 was $15.2 million, compared to net income of $8.2 million in Q2 2025.

• Adjusted EBITDA was $(2.9) million, down from $3.4 million in the prior-year period.

• Operating expenses rose to $114.2 million in Q2 2026, mainly due to higher maintenance, purchased power, and labor costs.

• Operating cash flow was $(23.9) million, compared to $11.4 million provided in Q2 2025.

Outlook and guidance

• Generation volumes at Merom are expected to improve in the second half of 2026 following reliability investments.

• The Turtle Creek project is targeting commercial operations in H2 2028, with a final investment decision expected in September 2026.

• Full-year 2026 capital expenditures are expected to remain consistent with 2025, excluding Turtle Creek investments.

• Additional forward sales are anticipated before year-end, with robust demand from a growing set of counterparties.

• The company is evaluating financing alternatives for a $350 million turbine equipment acquisition, with $338.8 million remaining to be funded.