Coal company Alliance Resource Partners, L.P. based in Tulsa reported a 70% increase in second quarter total revenues, reaching a record $616.5 million.
The company said the amount compared to $362.4 million in the second quarter of 2021 as a result of higher coal sales prices and volumes, which rose 43.3% and 13.9%, respectively, and higher oil & gas royalty prices and volumes, which increased by 64.7% and 27.6%, respectively.
Total operating expenses increased to $441.2 million in the 2022 Quarter, compared to $307.4 million in the 2021 Quarter, due primarily to increased coal sales volumes and inflationary cost pressures.
Net income for the 2022 Quarter increased to $161.5 million, or $1.23 per basic and diluted limited partner unit, compared to $44.0 million, or $0.34 per basic and diluted limited partner unit, for the 2021 Quarter.
EBITDA also increased 105.6% in the 2022 Quarter to $243.8 million compared to $118.6 million in the 2021 Quarter.
Continued robust market fundamentals during the 2022 Quarter pushed coal sales prices, volumes and coal sales revenues higher by 25.1%, 9.4% and 36.9%, respectively, compared to the Sequential Quarter. Increased revenues and lower income tax expense in the 2022 Quarter drove net income higher by 340.6% while EBITDA increased 60.1%, both as compared to the Sequential Quarter.
Total revenues increased 58.2% to $1.08 billion for the six months ended June 30, 2022, compared to $681.1 million for the six months ended June 30, 2021, primarily due to substantial increases in prices and volumes from both coal and oil & gas royalties.
Higher revenues, partially offset by increased total operating expenses and income tax expense, led to significantly higher net income, which rose 188.1% to $198.1 million for the 2022 Period, or $1.51 per basic and diluted limited partner unit, compared to $68.8 million, or $0.53 per basic and diluted limited partner unit, for the 2021 Period. EBITDA increased 86.1% in the 2022 Period to $396.2 million compared to $212.9 million in the 2021 Period.
As previously announced on July 26, 2022, the Board of Directors of ARLP’s general partner increased the cash distribution to unitholders for the 2022 Quarter to $0.40 per unit (an annualized rate of $1.60 per unit), payable on August 12, 2022, to all unitholders of record as of the close of trading on August 5, 2022. The announced distribution represents a 300.0% increase over the cash distribution of $0.10 per unit for the 2021 Quarter and a 14.3% increase over the cash distribution of $0.35 per unit for the Sequential Quarter.
“ARLP delivered strong financial and operating performance during the 2022 Quarter, as we again posted significant increases to coal and oil & gas sales volumes and prices, total revenues, net income and EBITDA compared to the 2021 Quarter,” said Joseph W. Craft III, Chairman, President and Chief Executive Officer.
For its Oil & Gas Royalties segment, significantly higher sales price realizations per BOE and increased volumes in the 2022 Quarter drove Segment Adjusted EBITDA higher by 125.0% to a record $34.6 million compared to $15.4 million for the 2021 Quarter. Compared to the Sequential Quarter, Segment Adjusted EBITDA increased by $6.1 million in the 2022 Quarter primarily due to higher oil & gas prices, which rose by 17.6%.
Craft continued, “ARLP also continued to make progress during the 2022 Quarter on its energy transition strategy we outlined last quarter. Adding to our earlier investments in Francis Energy and Infinitum Electric, we recently made a $25.0 million commitment to NGP ETP IV, L.P., a private equity fund sponsored by NGP Energy Capital Management, LLC. NGP ETP IV focuses on investments that are part of the global transition toward a lower carbon economy by partnering with top tier management teams and investing growth equity in companies that drive or enable the growth of renewable energy, the electrification of our economy or the efficient use of energy. In addition, our wholly owned subsidiary, Matrix Design Group, continued to increase sales of its technology services and products and remains on track to meet our expectations for revenue and EBITDA growth this year.”
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