FAQ on Stonegate Capital Partners' Coverage Update on Alliance Resource Partners, L.P. (NASDAQ: ARLP) for 2025 Q2

What were the key financial results for ARLP in Q2 2025?

ARLP reported total revenues of $547.5M, a 7.7% year-over-year decrease, net income of $59.4M, down from $100.2M in Q2 2024, and Adj. EBITDA of $161.9M, a 1.2% sequential increase.

Why did ARLP’s net income decrease in Q2 2025 compared to Q2 2024?

The decrease in net income was primarily due to lower revenues, increased depreciation, and a $25.0M non-cash impairment on a battery materials equity investment, partially offset by a $16.6M increase in the fair value of digital assets.

How did ARLP’s coal operations perform in Q2 2025?

Coal sales volumes increased by 6.8% year-over-year to 8.38 million tons, but pricing decreased by 11.3% to $57.92 per ton, leading to a coal sales revenue of $485.5M.

What updates were provided regarding ARLP’s royalty business?

Total royalty revenues were $53.1M, with O&G royalties at $35.5M and coal royalty tons sold increasing by 10.4% to 5.5 million tons, despite a 3.6% decline in average revenue per royalty ton to $3.21.

What is ARLP’s liquidity and cash flow position as of Q2 2025?

ARLP ended Q2 2025 with $499.2M in total liquidity, including $55.0M in cash and $444.2M available under its credit facilities, and generated $79.0M in free cash flow for the quarter.

What is ARLP’s updated FY25 guidance based on?

ARLP’s updated FY25 guidance is supported by expectations for improved production at Tunnel Ridge, higher tons sold from the Illinois Basin, cost efficiencies, and strong contracted commitments.

How does Stonegate Capital Partners value ARLP?

Stonegate uses an EV/EBITDA framework with a range of 6.0x to 6.5x, arriving at a valuation range of $29.51 to $32.25 with a midpoint of $30.88 based on F26 expected EBITDA.

What are the implications of ARLP’s Q2 2025 performance for investors?

Despite challenges, ARLP’s resilient sales volumes, strong liquidity, and updated guidance position it well for the remainder of FY25, suggesting potential stability and growth opportunities for investors.