Alliance Resource Partners(US:ARLP)2023-08-07 16:00Financial Performance - Total revenues for Q2 2023 increased by 3.5% to $641.8 million compared to $619.9 million in Q2 2022, driven by higher coal sales prices [123]. - Net income attributable to ARLP for Q2 2023 was $169.8 million, or $1.30 per unit, compared to $163.5 million, or $1.23 per unit, in Q2 2022 [123]. - Total revenues for the six months ended June 30, 2023, increased 20.4% to $1.30 billion compared to $1.08 billion for the same period in 2022, largely due to a 23.8% increase in coal sales [144]. - Net income attributable to ARLP for the 2023 Period was $361.0 million, or $2.75 per unit, compared to $201.6 million, or $1.51 per unit, in the 2022 Period [145]. - Net income for the three months ended June 30, 2023, was $171.3 million, a 4.4% increase from $163.9 million in the same period of 2022 [162]. Revenue Sources - Coal sales increased by $28.5 million or 5.4% to $560.3 million in Q2 2023, with average coal sales prices rising by 5.7% to $62.93 per ton [124]. - Other revenues increased to $17.9 million in Q2 2023 from $13.4 million in Q2 2022, primarily due to increased sales of mining technology products [130]. - Other revenues increased to $37.3 million in the 2023 Period from $25.7 million in the 2022 Period, primarily due to increased sales of mining technology products [150]. Operating Expenses - Total operating expenses rose to $457.9 million in Q2 2023, compared to $442.6 million in Q2 2022, mainly due to higher costs associated with purchased coal [123]. - Total operating expenses rose to $913.5 million in the 2023 Period, up from $816.7 million in 2022, primarily due to higher per ton costs and increased sales volumes [144]. - Operating expenses (excluding depreciation, depletion, and amortization) for the three months ended June 30, 2023, were $334.4 million, compared to $316.9 million for the same period in 2022, reflecting a 5.5% increase [164]. Segment Performance - Segment Adjusted EBITDA for coal operations increased by 7.4% to $337.0 million in Q2 2023, with per ton costs rising by 7.8% to $37.85 [124]. - Illinois Basin Coal Operations Segment Adjusted EBITDA increased 22.8% to $119.6 million in Q2 2023 from $97.4 million in Q2 2022, driven by a 14.3% increase in coal sales to $331.8 million [137]. - Appalachia Coal Operations Segment Adjusted EBITDA decreased 11.9% to $109.6 million in Q2 2023 from $124.4 million in Q2 2022, primarily due to a 5.3% decline in coal sales to $228.5 million [138]. - Segment Adjusted EBITDA increased by $118.8 million to $561.3 million in the 2023 Period from $442.5 million in the 2022 Period, representing a 26.8% increase [150]. - Illinois Basin Coal Operations Segment Adjusted EBITDA rose to $251.6 million in the 2023 Period from $175.6 million in the 2022 Period, with coal sales increasing 22.9% to $668.7 million [155]. - Appalachia Coal Operations Segment Adjusted EBITDA increased 28.9% to $226.1 million in the 2023 Period from $175.5 million in the 2022 Period, with coal sales rising 25.1% to $470.4 million [156]. - Oil & Gas Royalties Segment Adjusted EBITDA decreased 22.8% to $29.1 million in Q2 2023, attributed to lower average sales price per BOE despite higher volumes sold [139]. - Oil & Gas Royalties Segment Adjusted EBITDA decreased to $59.1 million in the 2023 Period from $68.5 million in the 2022 Period, primarily due to a 33.6% decrease in average sales price per BOE [157]. - Coal Royalties Segment Adjusted EBITDA increased 20.2% to $11.0 million in Q2 2023, driven by higher average royalty rates per ton [139]. Capital Expenditures and Investments - Total capital expenditures for 2023 are estimated to be in the range of $390.0 million to $440.0 million, with average annual maintenance capital expenditures projected at approximately $7.05 per ton produced [175]. - The company closed on the JC Resources Acquisition for $72.3 million on February 22, 2023, funded with cash on hand [166]. - The company repurchased $60.8 million of its 7.5% senior notes due 2025 during the six months ended June 30, 2023, with an additional $50.0 million redeemed in July 2023 [171]. - Net cash used in investing activities was $277.6 million for the six months ended June 30, 2023, up from $163.3 million in the prior year, primarily due to increased capital expenditures and acquisitions [173]. Cash Flow - Cash provided by operating activities increased to $504.0 million for the six months ended June 30, 2023, compared to $239.4 million for the same period in 2022 [172]. Market Risks - The company has no material exposure to currency exchange-rate risks as almost all transactions are denominated in United States dollars [185]. - Coal is sold internationally in United States dollars, which may affect competitiveness against foreign competitors if their currencies decline [185]. - The company has interest rate exposure on borrowings under the Revolving Credit Facility and Securitization Facility, which are at variable rates [186]. - There was no outstanding balance under the Revolving Credit Facility or Securitization Facility as of June 30, 2023 [186]. - Historically, the company's earnings have not been materially affected by changes in interest rates [186]. - The company has not utilized interest rate derivative instruments related to its outstanding debt [186]. - There were no changes in the company's quantitative and qualitative disclosures about market risk since the last Annual Report [186].