On July 29, 2024, Alliance Resource Partners LP (ARLP, Financial) released its 8-K filing detailing the financial and operating results for the second quarter of 2024. The company, a leading coal mining entity in the United States, operates through four segments: Illinois Basin, Appalachia, Oil & Gas Royalties, and Coal Royalties.
Performance Overview
Alliance Resource Partners LP (ARLP, Financial) reported total revenues of $593.4 million for the second quarter of 2024, a 7.6% decrease from $641.8 million in the same period last year. This decline was primarily due to a reduction in coal sales volumes, which fell by 11.8% due to transportation delays. The company’s net income for the quarter was $100.2 million, or $0.77 per basic and diluted limited partner unit, compared to $169.8 million, or $1.30 per unit, in the second quarter of 2023.
Key Financial Metrics
Despite the challenges, ARLP achieved a coal sales price realization increase of 3.8% to $65.30 per ton sold. However, the company faced increased total operating expenses, which contributed to a lower EBITDA of $177.7 million compared to $249.2 million in the same quarter last year.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Total Revenues | $593.4 million | $641.8 million | -7.6% |
| Net Income | $100.2 million | $169.8 million | -41.0% |
| EBITDA | $177.7 million | $249.2 million | -28.7% |
Operational Challenges
ARLP's coal sales volumes were significantly impacted by logistical challenges, including flooding on the Ohio River and disruptions caused by the Baltimore bridge incident. These issues led to higher inventories and increased costs. The company’s Appalachia segment saw a 27.3% decrease in tons sold compared to the same quarter last year.
"Coal sales volumes during the 2024 Quarter were impacted by flooding on the Ohio River delaying barge deliveries. Rail and port logistics were disrupted by the Baltimore bridge incident, which as time progressed impacted shipments from our Appalachia rail operations," commented Joseph W. Craft III, Chairman, President, and Chief Executive Officer.
Financial Achievements
Despite the setbacks, ARLP strengthened its balance sheet by successfully completing a Senior Notes offering, which enhanced its liquidity position. The company ended the quarter with total liquidity of $666.0 million, including $203.7 million in cash and cash equivalents.
Income Statement Highlights
For the six months ended June 30, 2024, ARLP reported total revenues of $1.25 billion, a 4.6% decrease from $1.30 billion in the same period last year. Net income for the period was $258.2 million, or $1.98 per unit, compared to $361.0 million, or $2.75 per unit, in the first half of 2023.
Balance Sheet and Cash Flow
As of June 30, 2024, ARLP reported total assets of $3.05 billion, up from $2.79 billion at the end of 2023. The company’s total debt and finance leases outstanding were $503.9 million, including $400 million in newly issued Senior Notes due 2029. ARLP generated $425.4 million in cash flows from operating activities during the first half of 2024.
Outlook and Guidance
Looking ahead, ARLP has adjusted its full-year guidance for 2024, expecting to sell approximately 34.0 million tons of coal, a 2.6% decrease from its original guidance. The company also anticipates strong performance from its Oil & Gas Royalties segment, driven by increased activity in the Permian Basin.
"The increase in coal-fired generation and inventory drawdown is constructive for the U.S. thermal coal market and for ARLP as we look forward to next year and beyond," stated Mr. Craft.
For more detailed financial information and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Alliance Resource Partners LP for further details.
