Alliance Resource Partners Q2 2025 Earnings Fall 31% on $25M Impairment and 10.7% Lower EBITDA

Alliance Resource Partners, L.P. (NASDAQ: ARLP) reported mixed financial results for the second quarter of 2025, marked by a 7.7% year-over-year revenue decline to $547.5 million, primarily driven by reduced coal sales prices and lower transportation revenues despite a 6.8% increase in coal sales volumes. Net income fell to $59.4 million, or $0.46 per unit, from $100.2 million, or $0.77 per unit, in the prior-year period. The drop was exacerbated by a $25.0 million non-cash impairment loss on an investment in a battery materials company and higher depreciation expenses. Adjusted EBITDA for the quarter was $161.9 million, a 10.7% decrease from $181.4 million in Q2 2024 [1].

Segment performance highlighted regional disparities, with the Illinois Basin recording a 15.2% rise in coal sales volumes but a 10.1% decline in prices per ton. Conversely, Appalachia experienced a 16.8% drop in sales volumes and a 5.8% price decrease. Despite these challenges, June 2025 marked record monthly shipping volumes at the Hamilton and River View mines [1]. Year-to-date comparisons revealed a $7.0 million revenue increase from Q1 2025, yet net income fell by $14.6 million due to the impairment loss and elevated operating costs [1].

The company updated its 2025 guidance, projecting total coal sales volumes between 32.75 million and 34.00 million tons. Appalachia’s output is expected to contract due to reduced production at Tunnel Ridge and a customer default at MC Mining, while the Illinois Basin may see modest gains. In the Oil & Gas Royalties segment, BOE volumes guidance was raised by 5%, buoyed by strong performance despite lower oil prices impacting royalty revenue. CEO Joseph W. Craft III emphasized optimism about the domestic thermal market’s fundamentals, citing data center expansion and manufacturing growth, along with regulatory tailwinds from the One Big Beautiful Bill Act and grid reliability initiatives [1].

Analyst forecasts underscored the magnitude of the quarter’s underperformance, with adjusted earnings of $0.46 per unit missing expectations of $0.61, and revenue totaling $547.5 million below the projected $583.91 million [2]. GAAP earnings per share fell short by $0.15, contributing to a $36.41 million revenue shortfall [2]. These gaps reflect broader industry challenges, including volatile coal prices and shifting demand dynamics. Analysts noted that ARLP’s operational flexibility and capital projects could help stabilize margins, though long-term structural risks such as environmental regulations and energy transition trends remain unaddressed in the current guidance [2].

The mixed results highlight ARLP’s vulnerability to external pressures while underscoring its strategic focus on energy security. While management did not outline immediate corrective measures, the updated guidance signals a pragmatic approach to align with market realities. Investors are divided, with some viewing the near-term struggles as temporary and others cautioning against the sector’s long-term sustainability. The company’s ability to leverage its high-quality acreage and capitalize on domestic thermal demand will be critical in determining its trajectory as renewable energy adoption continues to reshape the energy landscape [2].

Source:

[1] [Alliance Resource Partners (ARLP) Reports Mixed Q2 2025 Results](https://coinmarketcap.com/community/articles/68875f12361abe5ce4db2024/)

[2] [Alliance Resource Partners GAAP EPS of $0.46 Misses by $0.15, Revenue of $547.5M Misses by $36.41M](https://seekingalpha.com/news/4472658-alliance-resource-partners-gaap-eps-of-0_46-misses-by-0_15-revenue-of-547_5m-misses-by-36_41m)