Stonegate Capital Partners Updates Coverage on Alliance Resource Partners, L.P. (ARLP) 2025 Q1

Rhea-AI Summary

Alliance Resource Partners (NASDAQ: ARLP) showed mixed performance in Q1 2025, as reported in Stonegate Capital Partners' updated coverage. Total revenues declined 17.1% year-over-year to $540.5 million, mainly due to a 10.4% drop in coal sales volumes.

Key financial metrics include:

• Net income decreased to $74.0 million from $158.1 million in Q1 2024
• Adjusted EBITDA reached $159.9 million, up 29.0% sequentially
• Over 96% of expected 2025 coal sales volumes are committed and priced
• Added 17.7 million tons in contract commitments for 2025-2028

Despite lower revenues and decreased digital asset values, the company's performance was partially supported by reduced operating expenses and oil & gas royalty revenues. ARLP maintains a positive outlook for FY25, expecting higher domestic sales volumes and operational efficiencies to help maintain margins comparable to FY24.

Positive

• Sequential Adj. EBITDA growth of 29% to $159.9M in Q1 2025
• Over 96% of 2025 coal sales volumes already committed and priced
• Secured 17.7M tons of new contract commitments for 2025-2028
• Oil & gas royalty revenues helped offset coal revenue decline
• Operational cost efficiencies expected to maintain FY24-comparable margins

Negative

• 17.1% year-over-year revenue decline to $540.5M in Q1
• 53.2% drop in net income from $158.1M to $74.0M YoY
• 10.4% decrease in coal sales volumes
• Decrease in fair value of digital assets
• Persistent near-term pressure on pricing

Insights

Financial Analyst

ARLP reports significant YoY revenue and profit declines, though sequential EBITDA improvement and strong forward contracts provide some stability.

ARLP's Q1 2025 results reveal substantial year-over-year declines across key metrics, with total revenue dropping 17.1% to $540.5 million and net income falling to $74.0 million from $158.1 million in Q1 2024. This performance deterioration stems primarily from a 10.4% decrease in coal sales volumes combined with lower pricing pressures.

The sequential picture shows some improvement, with Adjusted EBITDA increasing 29.0% quarter-over-quarter to $159.9 million, suggesting operational enhancements despite market challenges. The company's reduction in operating expenses partially mitigated the revenue decline, indicating effective cost management strategies.

Forward visibility appears strong, with over 96% of expected 2025 coal sales volumes already committed and priced. The addition of 17.7 million tons of contract commitments through 2028 provides revenue stability in an uncertain macroeconomic environment. Management's updated FY25 guidance reflects confidence in higher domestic sales volumes and operational efficiencies, though they acknowledge persistent near-term pricing pressures.

The diversification into oil & gas royalty revenues has provided some buffer against coal market volatility, though the decrease in fair value of digital assets negatively impacted quarterly results. While efficiency gains are expected to sustain margins comparable to FY24, the significant year-over-year performance decline remains concerning despite the sequential improvements and strong contract position.

Dallas, Texas--(Newsfile Corp. - April 29, 2025) - Alliance Resource Partners, L.P. (NASDAQ: ARLP): Stonegate Capital Partners updates coverage on Alliance Resource Partners, L.P. ARLP reported a resilient 1Q25, with lower coal sales volumes and pricing partially offset by oil & gas royalty revenues. Total revenues for the quarter decreased by 17.1% year-over-year to $540.5M, primarily due to a 10.4% decline in coal sales volumes. Net income for the quarter was down to $74.0M compared to $158.1M in 1Q24, primarily due to lower revenues and a decrease in the fair value of digital assets, buoyed in part by a reduction in operating expenses. Adj. EBITDA came in at $159.9M, a 29.0% increase sequentially. Despite macroeconomic uncertainties, ARLP updated its FY25 guidance, buoyed by expectations for higher domestic sales volumes, operational cost efficiencies, and solid contracted commitments. Although near-term pressures on pricing persist, efficiency gains are anticipated to sustain margins comparable to FY24.

To view the full announcement, including downloadable images, bios, and more, click here.

Key Takeaways:

• Total revenue of $540.5 million, net income of $74.0 million, and Adjusted EBITDA of $159.9 million.
• 2025 expected coal sales volumes over 96% committed and priced.
• Added 17.7 million tons of contract commitments over the 2025 - 2028 time period.

Click image above to view full announcement.

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About Stonegate

Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking, equity research and capital raising for public and private companies.

Contacts:

Stonegate Capital Partners
(214) 987-4121
info@stonegateinc.com

Source: Stonegate, Inc.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/250123

FAQ

What are ARLP's Q1 2025 revenue and earnings results?

In Q1 2025, Alliance Resource Partners (ARLP) reported total revenue of $540.5 million, down 17.1% year-over-year, and net income of $74.0 million, compared to $158.1 million in Q1 2024. Adjusted EBITDA was $159.9 million, showing a 29.0% sequential increase.

How much of ARLP's 2025 coal production is committed and priced?

Alliance Resource Partners has over 96% of its expected 2025 coal sales volumes already committed and priced, demonstrating strong forward contract coverage.

What caused ARLP's revenue decline in Q1 2025?

The 17.1% revenue decline was primarily due to a 10.4% decrease in coal sales volumes and lower pricing, though this was partially offset by oil & gas royalty revenues.

What is ARLP's contract commitment outlook for 2025-2028?

Alliance Resource Partners has secured 17.7 million tons of new contract commitments spanning the period from 2025 to 2028, indicating strong future sales visibility.

How is ARLP maintaining profitability despite lower coal prices?

ARLP is maintaining profitability through operational cost efficiencies and expects to sustain margins comparable to FY24 despite near-term pricing pressures.