Citing logistics issues that affected exports, Alpha Metallurgical Resources recently released preliminary sales volumes and realizations for Q3 2023 and revised its full year 2023 guidance downward.
“Alpha’s third quarter was negatively impacted by a number of factors that warrant an announcement to the market ahead of our earnings release on November 2,” said Andy Eidson, CEO, Alpha Metallurgical Resources. “We have also tightened and adjusted our full-year guidance ranges for shipment volumes and met segment cost of coal sales. On top of some weather-related problems that caused vessel delays in the quarter, we experienced mechanical issues at DTA that hampered the ability to load and ship our coal. We expect to provide additional information soon regarding our analysis of DTA’s long-range capital improvement needs to strengthen its efficiency and restore capacity lost to recurrent operational interruptions.”
Alpha is reducing full-year 2023 metallurgical coal shipment guidance to a range of 14.8-15.2 million tons, down from the previous range of 15-16 million tons. The company is increasing volume guidance for thermal coal to 500,000 to 700,000 tons, up from the prior range of 300,000 to 600,000 tons. These adjustments bring Alpha’s total 2023 shipment guidance down to a range of 16.3-17.3 million tons across the entire organization, from the prior range of 16.3-18 million tons.
“Along with lower-than-expected shipment volumes in the quarter, we sold some lower-priced tons from the development areas at new mines during the pricing trough early in the quarter, which negatively impacted our average realizations for the period,” Eidson said.
The company increased its met segment cost of coal sales guidance to a range of $110/ton to $113/ton, up from the previous range of $106/ton to $112/ton.
“In light of the logistics challenges we have experienced throughout the year, we lowered our overall shipment volume guidance and tightened the ranges to reflect our expectations for the balance of the year,” said Todd Munsey, CFO, Alpha Metallurgical Resources. “Additionally, due to further investments in employee wages as well as the significant movement of the met coal indices, which directly impact sales-related costs, we are increasing our met segment cost of coal sales guidance for the full year.”
For 2024, the company has committed approximately 4 million tons of met coal at an average price of $160.91/ton to domestic customers. Those tons include committed carryover tons from 2023.