Alliance Resource Partners, L.P. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Key Highlights
  • Quarter in Context: The second quarter of 2020 was severely impacted by the COVID-19 pandemic leading to reduced energy demand, forced mine idlings, and a challenging operating environment.
  • Coal Production & Sales:
    • Coal production was 4.3 million tons in Q2 2020, down 46.1% from Q1 2020 due to temporary mine idlings.
    • Sales volumes fell 28.5% and coal revenues fell 24.9% sequentially versus Q1 2020.
    • Per ton coal realizations improved sequentially by 5% to $45.56/ton due to higher-priced Appalachian sales.
    • Coal segment adjusted EBITDA declined 43.7% to $55.2M from $97.9M in Q1 2020.
  • Minerals Segment Performance:
    • Revenues from oil and gas royalties/lease bonuses down 45% sequentially to $7.8M.
    • Segment adjusted EBITDA dropped 50% to $6.9M compared to $13.8M in Q1 2020.
  • Company-Wide Financials:
    • Q2 2020 free cash flow increased by $29.2M.
    • Liquidity rose 15.6% to $298.6M compared to Q1 2020.
    • Debt was reduced by $49.6M during the quarter.
    • YTD 2020 revenues were $606M, down 41.9% versus $1.04B from H1 2019.
    • YTD adjusted EBITDA was $146.5M, down 56.2% from H1 2019.

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Operator: Good morning, and welcome to Alliance Resource Partners Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Brian L. Cantrell, Senior Vice President and Chief Financial Officer. Please go ahead. Brian Cantrell: Thank you, Gary, and welcome, everyone. Earlier this morning, Alliance Resource Partners released its second quarter 2020 financial and operating results, and we’ll now discuss these results as well as our prospective on market conditions. Following our prepared remarks, we’ll open the call to your questions. Before we begin, a reminder that some of our remarks today may include forward-looking statements that are subject to a variety of risks, uncertainties and assumptions that are contained in our filings from time-to-time with the Securities and Exchange Commission and are also reflected in this morning’s press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, the partnership has no obligation to publicly update or revise any forward-looking statement

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