Alliance Resource Partners, L.P. Reports 3.6% Decrease in Total Revenues for Q3 2024

Alliance Resource Partners, L.P. (NASDAQ: ARLP), a leading coal producer in the eastern United States, has reported its financial results for the third quarter of 2024. Total revenues for the quarter stood at $613.6 million, marking a 3.6% decrease from the previous year’s third quarter, which recorded $636.5 million. This decline was attributed primarily to reduced coal sales prices and lower transportation revenues.

Net income for the quarter was $86.3 million, translating to $0.66 per basic and diluted limited partner unit, significantly lower than the $153.7 million or $1.18 per unit achieved in the same period last year. The decrease in net income was primarily due to reduced revenues and increased operating expenses.

Despite these challenges, the quarter saw a 3.4% increase in total revenues compared to the sequential quarter, driven by a 6.7% rise in coal sales volumes. The company sold 8.4 million tons of coal, up from 7.9 million tons in the previous quarter.

However, net income and EBITDA decreased by 13.9% and 3.9%, respectively, compared to the sequential quarter due to higher operating expenses. The 2024 quarter also saw an 11.9% increase in oil and gas royalty volumes, which contributed positively to the revenue stream. The company completed $10.5 million in oil and gas mineral interest acquisitions during this period, further strengthening its portfolio.

Alliance Resource Partners, L.P. Falls Short of Expectations in Third Quarter of 2024

The financial results for the third quarter fell short of market expectations. Analysts had anticipated an earnings per share (EPS) of $0.86, whereas the actual EPS was $0.66. Similarly, the expected revenue was $641.98 million, but the company reported $613.6 million.

This shortfall in revenue was primarily due to lower coal sales volumes and pricing related to export sales from the MC Mining, Mettiki, and Hamilton operations. Additionally, shipping deferrals on some of the higher-priced domestic contracted commitments contributed to the revenue decline.
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Despite the lower-than-expected results, the company managed to improve its coal sales volumes sequentially, which helped offset some of the revenue declines. The increase in oil and gas royalties also provided a cushion against the adverse impacts of reduced coal sales prices. The company’s proactive steps to align production with shipments and reduce stockpile levels at key operations helped manage costs and improve operational efficiency.

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Guidance and Future Outlook

Looking ahead, Alliance Resource Partners remains focused on its growth strategy, particularly in the oil and gas royalties segment. The company has increased its committed and priced sales tons for the 2025 full year by 5.9 million tons to 22.5 million tons.

This strategic move reflects the company’s confidence in the underlying demand fundamentals for coal, particularly in the Midwest, Mid-Atlantic, and Southeast markets. The company is also actively finalizing commitments for 21.7 million tons over the 2025 to 2030 period and is in discussions to further enhance its future commitments.

The company is maintaining its guidance for the full year ending December 31, 2024. It expects total sales volumes to range between 33.50 and 34.50 million short tons, with coal sales prices per ton sold estimated to be between $63.75 and $64.50.

The company also anticipates continued growth in its oil and gas royalties segment, with projected sales volumes ranging between 1,500 and 1,600 thousand barrels of oil and 5,800 to 6,200 thousand cubic feet of natural gas.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.