Alliance Resource Partners LP (ARLP) Reports Q3 2023 Earnings
ARLP's Q3 2023 total revenues slightly increased to $636.5 million, primarily due to higher transportation and other revenues.
Net income for Q3 2023 was $153.7 million, or $1.18 per basic and diluted limited partner unit.
ARLP declared a quarterly cash distribution of $0.70 per unit, representing a 40.0% increase over the cash distribution of $0.50 per unit for Q3 2022.
The company completed $50 million in new ventures investments during Q3 2023.
On October 27, 2023, Alliance Resource Partners LP (NASDAQ:ARLP) released its financial and operating results for the quarter ended September 30, 2023. The company reported a slight increase in total revenues to $636.5 million, compared to $632.5 million for the same quarter in 2022. This increase was primarily due to higher transportation and other revenues, partially offset by lower oil & gas royalties.
Financial Performance
Net income for Q3 2023 was $153.7 million, or $1.18 per basic and diluted limited partner unit, compared to $167.7 million, or $1.25 per basic and diluted limited partner unit, for Q3 2022. This decrease was a result of increased total operating expenses, partially offset by higher interest income and lower income tax expense. EBITDA for Q3 2023 was $227.6 million compared to $253.8 million in Q3 2022.
CEO Commentary
Our well-contracted coal order book enabled us to navigate an otherwise challenging operating environment during the 2023 Quarter," commented Joseph W. Craft III, Chairman, President and Chief Executive Officer. "Our coal segment achieved higher realized pricing per ton sold relative to both the 2022 and Sequential Quarters, a theme that continues to favorably impact year-to-date results, particularly with regards to EBITDA and net income."
Balance Sheet and Liquidity
As of September 30, 2023, total debt and finance leases outstanding were $371.0 million, including $284.6 million in ARLP's 2025 senior notes. The Partnership's total and net leverage ratio was 0.36 times and 0.17 times, respectively, as of September 30, 2023. ARLP ended the 2023 Quarter with total liquidity of $629.5 million.
Strategic Investments
During Q3 2023, ARLP invested approximately $50 million in two companies that align with the Partnerships strategy to allocate a portion of excess cash flows into high-growth businesses where ARLP can leverage its core competencies to generate meaningful, risk-adjusted returns.
Outlook
ARLP provided updated guidance for the full year 2023, with expectations of slightly adjusted coal sales volumes and pricing. The company also expects Appalachia operating expense per ton sold to be 8-10% higher during the fourth quarter of 2023.
Explore the complete 8-K earnings release (here) from Alliance Resource Partners LP for further details.
This article first appeared on GuruFocus.
