Alliance Resource Partners(US:ARLP)2025-05-09 20:14Financial Performance - Total revenues for Q1 2025 decreased by 17.1% to $540.5 million compared to $651.7 million in Q1 2024, primarily due to reduced coal sales volumes and prices [110]. - Coal sales dropped to $468.5 million in Q1 2025 from $561.9 million in Q1 2024, with a decrease of 10.4% in tons sold [112]. - Net income attributable to the company for Q1 2025 was $74.0 million, or $0.57 per unit, down from $158.1 million, or $1.21 per unit, in Q1 2024, reflecting lower revenues and a decrease in the fair value of digital assets [115]. - Segment Adjusted EBITDA decreased by $80.1 million to $180.5 million in Q1 2025 from $260.6 million in Q1 2024 [116]. - Cash provided by operating activities was $145.7 million for Q1 2025, down from $209.7 million in Q1 2024, mainly due to decreased net income and unfavorable working capital changes [133]. Production and Sales - Tons produced in Q1 2025 were 8,457, a decrease of 7.2% from 9,114 tons in Q1 2024 [109]. - Tons sold in Illinois Basin Coal Operations decreased by 6.1% to 6,042 in Q1 2025 compared to 6,437 in Q1 2024 [120]. - Average coal sales price per ton in Appalachia decreased by 8.5% compared to Q1 2024, reflecting lower export price realizations [121]. Expenses - Labor and benefit expenses per ton produced increased by 5.9% to $13.23 in Q1 2025 from $12.49 in Q1 2024 [113]. - Material and supplies expenses per ton produced decreased by 9.2% to $13.51 in Q1 2025 from $14.88 in Q1 2024 [117]. - Segment Adjusted EBITDA Expense for Illinois Basin decreased by 9.9% to $210.0 million in Q1 2025 from $233.1 million in Q1 2024 [120]. - Appalachia Coal Operations Segment Adjusted EBITDA fell 79.0% to $15.6 million in Q1 2025 from $74.2 million in Q1 2024, driven by a 29.3% decrease in coal sales to $135.3 million [121]. - Oil & Gas Royalties Segment Adjusted EBITDA decreased to $29.9 million in Q1 2025 from $31.4 million in Q1 2024, attributed to a 2.0% reduction in oil & gas royalty volumes [123]. Investments and Capital Expenditures - The company committed to invest up to $25.0 million in Gavin Generation Holdings A, LP, representing a 5.0% interest [107]. - Total capital expenditures for 2025 are estimated to be in the range of $285.0 million to $320.0 million, with average annual maintenance capital expenditures projected at approximately $7.28 per ton produced [137]. - Net cash used in investing activities decreased to $93.1 million in Q1 2025 from $120.5 million in Q1 2024, primarily due to reduced capital expenditures [134]. Financing Activities - Net cash used in financing activities increased to $108.3 million in Q1 2025 from $15.0 million in Q1 2024, mainly due to decreased borrowings under the securitization facility [136]. - The company has $80.6 million remaining authorized for unit repurchases as of March 31, 2025, with no units repurchased during Q1 2025 [132]. - The company anticipates having sufficient cash flow to meet 2025 cash requirements, with cash and cash equivalents projected at $81.3 million as of March 31, 2025 [137]. Risk Factors - The company is exposed to commodity price risks due to significant long-term coal sales contracts, which are subject to price adjustment provisions [142]. - The company's results are highly dependent on the prices received for coal, oil, and natural gas, with a significant decline in oil and gas prices potentially impacting royalty revenues [145]. - Credit risk is primarily with domestic electric power generators and reputable global brokerage firms, with measures in place to evaluate and monitor customer creditworthiness [147]. - The company does not have material exposure to currency exchange-rate risks, as almost all transactions are denominated in U.S. dollars [148]. - Borrowings under the Revolving Credit Facility and Securitization Facility are at variable rates, exposing the company to interest rate risks [149]. - The company projects significant long-term cash requirements, which may necessitate incurring debt or seeking additional equity capital [137]. - The availability and cost of additional capital will depend on market conditions, the market price of common units, and the company's financial condition [137].