Alliance Resource Partners L.P. reported increased coal sales and production volumes.
Coal sales volumes increased 14.4% and oil and gas prices rose by 88.2% in 2021 to drive total revenues higher by 18.2% to $1.57 billion, compared to $1.33 billion for 2020.
“ARLP continued to benefit from favorable market conditions during the 2021 quarter, posting significant increases over the 2020 quarter to coal and oil and gas sales volumes, total revenues, net income and EBITDA,” President and CEO Joe Craft said. “To meet our contractual commitments, our coal operations worked overtime to increase coal sales volumes by 606,000 tons and our marketing team’s efforts to capture the benefits of a rising market resulted in price realizations increasing by $2.54 per ton, both as compared to the sequential quarter.”
The company secured new agreements during the 2021 quarter for the delivery of approximately 13.3 million tons through 2024. With these new contracts, ARLP enters 2022 with approximately 89% of its anticipated coal sales volumes priced and committed.
“Higher natural gas and coal prices combined with a stronger export market were the primary factors that contributed to ARLP’s 2021 full-year performance exceeding our initial expectations,” Craft said. “During 2021, ARLP generated $302.2 million of free cash flow, reduced total debt and finance lease obligations by $161.5 million, improved total leverage to 0.93 times and increased liquidity by $105.4 million.”
Through the end of 2021, coal-fired generation in U.S. markets increased 20.9% year-over-year as total power demand increased 4.4% and high natural gas prices buoyed coal demand, Craft said. He added that demand and pricing for U.S. coal in the export market continues to be attractive, supported by increased power demand, high natural gas and LNG prices and a lack of global supply response along with supply disruptions.
The company anticipates steady growth from the coal royalties segment during 2022.