Improved quarterly finances for Alliance Resources

 

Tulsa’s Alliance Resource Partners L.P., one of the largest coal-mining operations in the U.S. reported a large gain in net income in the just concluded quarter.

Its net income soared $169.5 million to $24.7 million or 19 cents a basic and diluted limited partner unit. The increase in the quarter that ended March 31 compared to a net loss of $144.8 million or $1.14 per unit a year ago.

“ARLP’s financial performance during the 2021 Quarter was generally in line with our expectations, despite 950,000 tons of delayed shipments impacting EBITDA and cash flow by approximately $13.0 million,” said Joseph W. Craft III, Chairman, President and Chief Executive Officer.

Excluding the impact of $157.0 million of non-cash charges in the 2020 Quarter, Adjusted net income for the 2021 Quarter increased 102.5% to $24.7 million compared to $12.2 million for the 2020 Quarter.

Weather-related transportation disruptions and an unplanned customer plant outage impacted anticipated coal shipments during the 2021 Quarter, contributing to a 9.2% reduction in total revenues compared to the 2020 Quarter.

Lower coal volumes and ongoing efficiency initiatives at our mining operations contributed to lower operating expenses of $196.5 million for the 2021 Quarter, compared to $234.3 million for the 2020 Quarter, largely offsetting lower total revenues.  As a result, Segment Adjusted EBITDA decreased slightly to $109.8 million in the 2021 Quarter compared to $111.7 million in the 2020 Quarter.

Despite the quarterly increase in net income total revenues in the 2021 Quarter were $47.9 million lower compared to the quarter ended December 31, 2020 , primarily due to lower coal sales volumes.

Even though lower revenues were partially offset by decreased operating expenses and reduced depreciation, depletion and amortization, net income and EBITDA for the 2021 Quarter declined $10.3 million and $27.0 million, respectively, compared to the Sequential Quarter.

ARLP also announced that the Board of Directors of its general partner declared a cash distribution to unitholders of $0.10 per unit (an annualized rate of $0.40 per unit) for the 2021 Quarter, payable on May 14, 2021 to all unitholders of record as of the close of trading on May 7, 2021.

The company’s recent investments in oil and gas in recent years paid off.

“Our Oil & Gas Royalties segment benefited from significantly higher commodity prices and greater than anticipated sales volumes.  With positive free cash flow generated during the 2021 Quarter, ARLP reduced its total debt and finance lease obligations by $52.9 million,” added Craft.

“Expectations for our Oil & Gas Royalties segment are also increasing.  The pace of drilling and completion activity on ARLP’s oil & gas mineral interests has exceeded our initial expectations and recent permitting activity suggests this trend is likely to continue for the remainder of 2021.”

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