Tulsa’s big coal company, Alliance Resources, reported a 3.5% increase in second quarter revenues, driven primarily by higher coal sales price per ton as well as growing demand for coal to power electric-generating plants during the nation’s heat wave.
The company said total revenues for the quarter were $641.8 million compared to $619.9 million a year earlier. thanks to a 5.7% gain in coal prices, the company reported net income was $169.8 million, or $1.30 per unit, a 3.8% increase compared to $163.5 million, or $1.23 per unit for the 2022 Quarter. Its EBITDA also improved by 1% from a year earlier, reaching $249.2 million.
Revenues in the first six months of the year were even higher. Coal sales prices and coal sales revenues during the 2023 Period were higher by 21.8% and 23.8%, respectively, compared to the 2022 Period. Increased revenues and lower income tax expense, partially offset by higher total operating expenses, in the 2023 Period drove net income higher by 79.0% and EBITDA increased 29.6%, both as compared to the 2022 Period.
“ARLP delivered solid results during the second quarter of 2023, keeping us on track to deliver record financial results this year,” commented Joseph W. Craft III, Chairman, President and Chief Executive Officer.
“Our year-to-date results have been impressive despite coal demand, both domestically and globally, being lower than we expected entering this year, due to slower economic growth, mild weather in our targeted markets, and lower natural gas prices.”
He also said that recent reports of sustained record heat in the U.S. should once again emphasize the nation has a critical needfor a reliable, affordable and diverse energy mix.
” Markets can turn quickly in response to moderate swings in demand, particularly when supply remains constrained and policy decisions impact reliability. Our operations continue to provide a low-cost, secure source of supply for our customers, and with our recent actions to further strengthen our balance sheet, we expect to do so well into the future.”
However, Alliance also chose to reduce its coal production and sales volume guidance for 2023, even though the heat wave supported additional coal burn this summer for domestic and export markets. Craft said until Henry Hub natural gas prices rise about $3 per million Btu, the company leaders don’t expect any meaninful gas-to-coal switching domestically.