Alliance Resource Partners Reports Mixed Q3 2025 Results with Strong Operational Performance
TL;DR
Alliance Resource Partners gained competitive advantage through higher coal volumes and reduced costs, boosting net income despite lower pricing in 3Q25.
ARLP's 3Q25 performance showed a 6.9% revenue decrease offset by 8.5% production increase and 14.8% sequential EBITDA growth through improved operational execution.
ARLP's strengthened financial position and consistent cash distributions support economic stability for investors and communities dependent on the energy sector.
ARLP holds 568 Bitcoin valued at $64.8 million while achieving 5.5% coal EBITDA growth despite transitioning longwall operations at Tunnel Ridge.
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Alliance Resource Partners, L.P. reported mixed third-quarter 2025 results, showing operational resilience despite challenging market conditions. The partnership achieved higher coal volumes and improved unit costs that partially offset lower year-over-year realized pricing, resulting in net income increasing to $95.1 million compared to $86.9 million in the same quarter last year.
Total revenues for the quarter decreased by 6.9% year-over-year to $571.4 million, as an 8.5% increase in coal production and 3.9% increase in coal sales volumes were more than offset by lower coal price realizations and reduced transportation revenues. Adjusted EBITDA showed sequential improvement, coming in at $185.8 million representing a 14.8% increase from the previous quarter. The partnership tightened its full-year 2025 guidance, projecting fourth-quarter results comparable to the third quarter, supported by improving operational execution.
Coal operations showed mixed regional performance with sales volumes totaling 8.70 million tons, up 3.9% year-over-year, while pricing decreased by 7.5% to $58.78 per ton. In the Illinois Basin, sales volumes rose 10.8% year-over-year to 6.61 million tons, driven by increased production, fewer longwall-move days at Hamilton, and improved recoveries at River View and Hamilton operations. However, pricing in the Illinois Basin declined 9.9% to $51.03 per ton. Appalachian operations saw volumes fall 13.3% year-over-year to 2.09 million tons as Tunnel Ridge transitioned to a new longwall district with better geology, while pricing in the region rose 3.1% to $83.28 per ton on a stronger sales mix.
The royalty business demonstrated strength with total royalty revenues for the quarter totaling $57.4 million. Oil and gas royalties contributed $32.1 million, with BOE volumes sold increasing 4.1% year-over-year to 0.899 million BOE, although the average sales price per BOE declined by 10.5% to $35.68. Coal royalty tons sold increased significantly by 38.1% to 7.06 million tons, with average revenue per royalty ton increasing by 7.4% to $3.50.
Alliance Resource Partners maintained strong financial positioning, ending the quarter with $541.8 million in total liquidity including $94.5 million in cash and $447.3 million available under its credit facilities. Free cash flow for the quarter was robust at $151.4 million, supporting the partnership's quarterly cash distribution of $0.60 per unit, or $2.40 per unit on an annualized basis. The partnership also held 568 Bitcoin valued at $64.8 million at quarter-end, reflecting its diversified asset strategy. Stonegate Capital Partners maintains coverage of the company through its research platform at https://stonegateinc.com.
The partnership's operational improvements and cost initiatives, combined with a growing order book, position it well for the remainder of fiscal year 2025. The mixed performance across different business segments highlights the company's ability to navigate variable market conditions while maintaining financial stability and returning value to unitholders through consistent distributions.
Curated from Reportable
