Wednesday, April 30, 2025
ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
First quarter financial results. Alliance reported first quarter adjusted EBITDA and earnings per unit (EPU) of $159.9 million and $0.57, respectively, compared to $238.4 million and $1.21 during the prior year period. We had projected EBITDA and EPU of $143.8 million and $0.48. While total revenue of $540.5 million was just shy of our $541.1 million estimate, we underestimated coal sales and overstated transportation revenue. Consequently, transportation expense was also overstated. Total operating expenses were $446.2 million compared to our $462.3 million forecast.
Corporate outlook for 2025 and 2026. Management’s guidance for 2025 was little changed, except for increasing the range for total coal sales tonnage, increasing expense as a percentage of oil & gas royalty revenue, depreciation expense, and lowering net interest expense expectations. For 2026, management expects the average coal sales price per ton to trend lower. Due to higher-priced, multi-contracts rolling off, the average sales price per ton could be 4% to 5% below the midpoint of ARLP’s 2025 guidance. We think planned 2025 long wall moves and actions to improve productivity and cost effectiveness could help offset lower prices.
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