While the Biden administration is out with new emission regulations that it believes will bring about a reduction in coal usage in the U.S., Tulsa’s Alliance Resource Partners announced increased coal sales in the most recent quarter. And company leadership believes electricity demand will only result in increased sales of coal.
Coal sales were up 2.4% year over year and rose to 8.7 million tons for the company. Its oil and gas royalty volumes also increased 18.3% to record volumes for the year and 11% more than the previous quarter.
Total revenues in the 2024 Quarter decreased slightly to $651.7 million compared to $662.9 million for the 2023 Quarter primarily as a result of lower average coal sales prices, partially offset by higher oil & gas royalties and other revenues.
The company’s net income was $158.1 million or $1.21 per unit compared to $191.2 million and $1.45 per unit a year earlier. EBITDA for the second quarter of 2024 was also down from $270.9 million last year to $235 million this year.
Compared to the Sequential Quarter, total revenues in the 2024 Quarter increased 4.2% primarily as a result of higher average coal sales prices, which increased 6.9% to $64.78 per ton sold compared to $60.60 per ton sold in the Sequential Quarter. Net income and EBITDA in the 2024 Quarter increased 36.9% and 28.6%, respectively, compared to the Sequential Quarter.
“We had a solid start to the year operationally, with all our mines running as expected and strong volumes coming from our Oil & Gas Royalties segment,” commented Joseph W. Craft III, Chairman, President and Chief Executive Officer.
“Our contracted coal position also contributed to our
performance for the 2024 Quarter mitigating the impact of mild winter weather and low natural gas prices.”
Craft explained the company plans to continue with its full-year guidance because operations are running as expected.
“We continue to maintain a small, uncontracted tonnage position that we can flex to either domestic or export markets as demand
dictates, while our Oil & Gas Royalties business is off to a strong start that should set the tone for another robust year.”
Electricity growth and new government regulations will also play an important role in the company’s growth. Craft said grid planners have nearly doubled the five-year electricity demand growth forecast.
“We expect this rapid growth in electricity demand will lead to delays and extensions in the premature closure of critical coal power plants in the markets we serve. We are making investments today that will position us to be the low-cost, reliable provider in a
market seeking to respond to accelerated demand associated with the electrification of new industry, and rapid load growth associated with data centers and artificial intelligence. ”