Alpha Metallurgical Resources Inc (AMR, Financial), a leading U.S. supplier of metallurgical products for the steel industry, announced its financial results for the third quarter ending September 30, 2023, on November 2, 2023.
Financial Performance
AMR reported a net income of $93.8 million, or $6.65 per diluted share, for the third quarter of 2023. This is a decrease from the net income of $181.4 million, or $12.16 per diluted share, reported in the second quarter. The total Adjusted EBITDA for the third quarter was $153.9 million, compared to $258.5 million in the second quarter.
Share Buyback and Dividend Program
AMR announced a $300 million increase in authorization for the share repurchase program, bringing the total authorization to $1.5 billion. The company has returned nearly $940 million to shareholders since the inception of the program. After the declaration of a quarterly dividend of $0.50 per share, the dividend program will cease, and the company will focus on share repurchases.
Operational Updates
AMR completed the transition to a pure-play metallurgical producer with the closure of its last remaining thermal mine, Slabcamp. The company also announced the successful refinancing of its Asset-Based Revolving Credit Facility (ABL). The company's 2024 operational guidance was issued, forecasting a bright outlook with a solid base of committed tonnage to domestic customers and the balance of output available for export.
Challenges and Future Plans
AMR's third quarter results were impacted by challenging events that resulted in lowered shipment guidance for the year. The company plans to make necessary investments over several years to minimize downtime and operational interruptions at the Dominion Terminal Associates, the Newport News facility where a majority of AMR's coal is exported.
Liquidity and Capital Resources
Cash provided by operating activities in the third quarter decreased to $157.2 million as compared to $317.2 million in the second quarter. As of September 30, 2023, the company had total liquidity of $390.1 million, including cash and cash equivalents of $296.1 million and $94.1 million of unused availability under the ABL.
Looking Ahead
AMR is issuing operational guidance for the 2024 calendar year. The company expects to ship between 15.5 million and 16.5 million metallurgical tons in 2024, as well as incidental thermal coal of between 0.9 million and 1.3 million tons. The company is also planning for a multi-year investment at the DTA facility to reduce downtime and benefit the company in the future.
Explore the complete 8-K earnings release (here) from Alpha Metallurgical Resources Inc for further details.
