Stonegate Capital Partners Highlights Alliance Resource Partners' Resilient Performance Amid Market Challenges

Alliance Resource Partners, L.P. (NASDAQ: ARLP) has shown a resilient performance in the second quarter of 2025, as highlighted by Stonegate Capital Partners in their updated coverage. Despite facing a 7.7% year-over-year decrease in total revenues to $547.5M, primarily due to an 11.3% decline in average coal sales prices and lower transportation revenues, the company managed to increase its coal sales volumes by 6.8% year-over-year to 8.38 million tons. This achievement underscores ARLP's ability to navigate through market uncertainties and maintain operational efficiency.

The net income for the quarter saw a significant drop to $59.4M from $100.2M in 2Q24, attributed to lower revenues, increased depreciation, and a $25.0M non-cash impairment on a battery materials equity investment. However, this was partially offset by a $16.6M increase in the fair value of digital assets, showcasing the company's diversified investment strategy. Adjusted EBITDA slightly increased by 1.2% sequentially to $161.9M, reflecting ARLP's cost management and operational adjustments in response to market dynamics.

ARLP's coal operations reported sales revenue of $485.5M, with the Illinois Basin seeing a 15.2% increase in sales volumes to 6.67 million tons, driven by record shipping at Hamilton and River View. Conversely, Appalachia volumes fell by 16.8% to 1.72 million tons due to operational challenges at Tunnel Ridge. The company's royalty business contributed $53.1M in revenues, with oil and gas royalties totaling $35.5M, despite a 9.6% decline in the average sales price per BOE.

Financially, ARLP remains robust with $499.2M in total liquidity and a free cash flow of $79.0M for the quarter. The company continues to return value to its unitholders with a quarterly cash distribution of $0.60 per unit. Stonegate Capital Partners' valuation of ARLP, using an EV/EBITDA framework, suggests a valuation range of $29.51 to $32.25, with a midpoint of $30.88, indicating confidence in the company's future performance.

For more detailed information on Alliance Resource Partners, L.P.'s performance and Stonegate Capital Partners' analysis, visit https://www.stonegateinc.com. This coverage update provides investors and industry observers with critical insights into ARLP's operational resilience and financial health amidst challenging market conditions.