Alliance Resource Partners(US:ARLP)2026-02-02 13:01Financial Performance - Fourth quarter 2025 net income increased by $66.3 million to $82.7 million, or $0.64 per unit, compared to $16.3 million, or $0.12 per unit for the 2024 Quarter [3]. - Full year 2025 total revenue was $2.19 billion, a decrease of 10.4% from $2.45 billion in 2024, with net income of $311.2 million, down from $360.9 million [7]. - Net income attributable to ARLP for the year 2025 was $311,163, a decline of 13.7% compared to $360,855 in 2024, with earnings per limited partner unit decreasing to $2.40 from $2.77 [37]. - Net income attributable to ARLP for the three months ended December 31, 2025, was $82.666 million, a significant increase from $16.330 million in the same period of 2024 [45]. - Adjusted EBITDA for the year ended December 31, 2025, was $698.739 million, compared to $714.230 million for the year ended December 31, 2024 [45]. - Adjusted EBITDA for the fourth quarter 2025 was $191.1 million, an increase of 54.1% compared to $124.0 million in the 2024 Quarter [5]. - Free cash flow for the three months ended December 31, 2025, was $93.846 million, up from $75.216 million in the same period of 2024 [48]. - The distribution coverage ratio for the year ended December 31, 2025, was 1.13, compared to 1.10 for the year ended December 31, 2024 [45]. Revenue and Sales - Total revenues for the fourth quarter 2025 decreased by 9.2% to $535.5 million, down from $590.1 million in the 2024 Quarter, primarily due to lower coal sales and transportation revenues [4]. - Total revenues for the year ended December 31, 2025, were $2,194,811, down 10.4% from $2,448,708 in 2024, with coal sales contributing $1,932,515, a decrease of 8.5% from $2,111,803 [37]. - Customer demand remains strong, with over 93% of the 2026 sales tons guidance already committed and priced [20]. Coal Operations - Coal production volumes for the fourth quarter 2025 increased to 8.2 million tons, representing an 18.7% year-over-year increase [4]. - Segment Adjusted EBITDA for Coal Operations increased by 36.7% to $144.0 million in the fourth quarter 2025 compared to $105.4 million in the 2024 Quarter [9]. - In Q4 2025, tons sold were 8,111, a decrease of 3.6% from 8,415 tons in Q4 2024, while tons produced increased by 18.6% to 8,189 from 6,901 tons [37]. - For 2026, coal royalty tons sold are expected to reach six million tons, representing a 25% increase compared to 2025 [20]. - The guidance for total coal sales tons in 2026 is projected between 33.75 million and 35.25 million short tons, with Illinois Basin sales tons estimated at 26.00 to 27.00 million [22]. - The expected coal sales price per ton sold for the Illinois Basin is projected to be between $50.00 and $52.00, while for Appalachia it is between $66.00 and $71.00 [22]. - ARLP anticipates segment adjusted EBITDA expense per ton sold to be between $33.00 and $35.00 for the Illinois Basin and between $49.00 and $53.00 for Appalachia [22]. Expenses and Liabilities - Operating expenses for the year 2025 totaled $1,809,508, down 12% from $2,054,579 in 2024, primarily due to lower coal production costs [37]. - Operating expenses for the three months ended December 31, 2025, were $328.193 million, a decrease from $407.090 million in the same period of 2024 [50]. - Total debt and finance leases as of December 31, 2025, were $463.7 million, with total and net leverage ratios of 0.66 times and 0.56 times, respectively [17]. - Current liabilities decreased to $204,426 in 2025 from $233,142 in 2024, reflecting improved liquidity management [38]. Capital Expenditures and Investments - The company made capital expenditures of $263,280 in 2025, down from $428,741 in 2024, indicating a focus on cost control [39]. - ARLP's total capital expenditures for 2026 are projected to be between $280 million and $300 million [22]. - The average annual estimated maintenance capital expenditures for 2026 are projected to be $7.23 per ton produced, slightly lower than the $7.28 per ton in 2025 [47]. - The company completed $14.4 million in oil and gas mineral acquisitions during the 2025 Quarter and aims to continue expanding its minerals portfolio [20]. - The company plans to continue exploring oil and gas reserve business combinations, with a commitment of $10,000 in 2025 [39]. Liquidity and Assets - As of December 31, 2025, ARLP reported total liquidity of $518.5 million, including $71.2 million in cash and cash equivalents and $447.3 million in available borrowings [18]. - The company reported a total asset value of $2,853,788 as of December 31, 2025, a slight decrease from $2,915,730 in 2024 [38]. - Digital assets increased to $51,834 in 2025 from $45,037 in 2024, reflecting ongoing investment in digital technologies [38]. Other Financial Metrics - The partnership declared a quarterly cash distribution of $0.60 per unit, or $2.40 per unit annualized, on January 27, 2026 [4]. - The cash distribution approved for the 2025 Quarter is $0.60 per unit, translating to an annualized rate of $2.40 per unit, payable on February 13, 2026 [19]. - The company recorded a litigation expense accrual of $15.3 million related to certain settlements [47]. - The net loss on equity method investments for the year ended December 31, 2025, was $20.976 million, compared to a gain of $4.961 million in 2024 [45].