As coal mining makes a resurgence throughout Europe because of the growing energy crisis, coal operators in the U.S. are doing well these days, including Tulsa-based Alliance Resource Partners, L.P. which reported record earnings in the just-finished quarter.
Industry leaders might say it’s an indication that coal-mining in the U.S. is far from dead as declared some years ago by the Obama administration.
The company on Monday reported big gains in financial and operating results for the quarter that ended Sept. 30, 2022 compared to a year earlier. Total revenues this year increased 51.3% to a record $628.4 million compared to $415.4 million for the 2021 quarter.
“Higher coal sales and production volumes combined with record per ton price realizations drove our total Coal Segment Adjusted EBITDA up 77.8% to $224.6 million as margins per ton sold jumped $9.58 compared to the 2021 Quarter,” said Joseph W. Craft III, Chairman, President and Chief Executive Officer.
“ARLP was also able to execute new coal sales commitments for delivery of 5.6 million tons through 2025 at prices supporting higher margins in the future. With ARLP sold out for this year and solid contracted coal sales volumes in 2023 and 2024, we have good visibility into our ability to generate cash flow growth over the next several years,” he added.
Alliance reported higher coal sales revenues which rose $188.3 million to $550.6 million, and oil & gas royalties revenues, which jumped 75.6% to $35.3 million. Coal sales revenues increased on the strength of record coal sales prices, which rose 40.5% in the 2022 Quarter to $59.94 per ton sold, and increased coal sales volumes, which were 8.1% higher compared to the 2021 Quarter.
Oil & gas royalties revenue in the 2022 Quarter benefited from significantly higher volumes and sales price realizations per BOE, which increased 33.1% and 31.6%, respectively, compared to the 2021 Quarter.
Total operating expenses increased to $450.3 million in the 2022 Quarter, compared to $348.7 million in the 2021 Quarter, due primarily to increased coal sales volumes and ongoing inflationary cost pressures.
Net income for the 2022 Quarter increased 186.0% to $164.6 million, or $1.25 per basic and diluted limited partner unit, compared to $57.5 million, or $0.44 per basic and diluted limited partner unit, for the 2021 Quarter. EBITDA also increased 84.0% in the 2022 Quarter to $250.2 million compared to $135.9 million in the 2021 Quarter.
Performance in the 2022 Quarter also improved compared to the quarter ended June 30, 2022 as modest increases to coal sales volumes and pricing pushed both coal sales and total revenues higher by 3.5% and 1.9%, respectively. Increased revenues, partially offset by higher total operating expenses in the 2022 Quarter, led net income and EBITDA higher by 1.9% and 2.6%, respectively, both as compared to the Sequential Quarter.
Total revenues increased 55.6% to $1.71 billion for the nine months ended September 30, 2022, compared to $1.10 billion for the nine months ended September 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 and income tax expenses, led to significantly higher net income, which rose 187.1% to $362.7 million for the 2022 Period, or $2.76 per basic and diluted limited partner unit, compared to $126.3 million, or $0.97 per basic and diluted limited partner unit, for the 2021 Period. EBITDA increased 85.3% in the 2022 Period to $646.3 million compared to $348.9 million in the 2021 Period.
Source: Business Wire