Alliance Resource Partners(US:ARLP)2026-02-02 16:02Financial Data and Key Metrics Changes - For Q4 2025, adjusted EBITDA was $191.1 million, up 54.1% from Q4 2024 and up 2.8% sequentially from Q3 2025 [4] - Net income attributable to ARLP in Q4 2025 was $82.7 million, or $0.64 per unit, compared to $16.3 million, or $0.12 per unit, in Q4 2024 [4] - Total revenues were $535.5 million in Q4 2025, down from $590.1 million in Q4 2024, primarily due to lower coal sales and transportation revenues [5] Business Line Data and Key Metrics Changes - Average coal sales price per ton for Q4 2025 was $57.57, a 4% decrease year-over-year and a 2.1% decrease sequentially [6] - Total coal production in Q4 2025 was 8.2 million tons, compared to 6.9 million tons in Q4 2024 [6] - In the Illinois Basin, coal sales volumes were 6.5 million tons in Q4 2025, down approximately 2% compared to both Q4 2024 and Q3 2025 [7] - In Appalachia, coal sales volumes were 1.7 million tons in Q4 2025, down from 1.8 million tons in Q4 2024 [8] Market Data and Key Metrics Changes - The oil and gas royalty segment achieved total revenue of $56.8 million in Q4 2025, up 17.2% year-over-year [11] - BOE volumes increased 20.2% year-over-year and 10% sequentially in Q4 2025 [11] - Total liquidity as of December 31, 2025, was $518.5 million, including $71.2 million in cash [13] Company Strategy and Development Direction - The company anticipates overall coal sales volumes for 2026 to increase to 33.75 million tons - 35.25 million tons, despite reduced sales volumes at the Mettiki Mine [14] - Contracting activity for 2026 is robust, with over 93% of expected volumes already committed and priced [14] - The company remains committed to investing in its oil and gas royalties business and pursuing disciplined growth in this segment [17] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong contracting activity and a favorable supply-demand dynamic as utilities opt for longer-term agreements [19] - The company noted that coal's value to the grid is increasingly recognized, especially during extreme weather events [26] - Management expects demand growth driven by data centers and industrial development, which will support coal pricing [25] Other Important Information - The company ended Q4 2025 with 1.1 million tons of coal inventory, an increase compared to previous quarters [10] - The anticipated impact of reduced sales volumes at Mettiki is reflected in the 2026 guidance, with potential impairment evaluations planned for Q1 2026 [10] Q&A Session Summary Question: What does it take to get to the high or low end of your price per ton guidance? - Management indicated that most remaining tons to be sold are in the Illinois Basin, with potential upside depending on customer contract flexibilities [34] Question: What would it take for Alliance to increase production? - Management stated that no new units are planned, but productivity improvements are expected to drive growth [40] Question: Any thoughts on modeling equity method investments going forward? - Management suggested a lower run rate of around $3 million per quarter for equity investment income moving forward [43] Question: How should we think about quarterly sales cadence in 2026? - Management expects Q1 2026 to be the lowest sales quarter, with gradual improvement anticipated in subsequent quarters [49] Question: How do you expect export sales to compare to 2025 levels? - Management noted that export sales are limited, focusing primarily on domestic customers due to higher netbacks [51]