Alpha Metallurgical Resources Q2 Earnings Call Highlights

Key Points

• Alpha Metallurgical Resources lowered its 2026 shipment outlook to 14.2–15.4 million tons after weak first-half volumes and reduced capacity at the Dominion Terminal Associates export facility.
• Second-quarter adjusted EBITDA fell to $25.6 million from $30 million in the prior quarter, while metallurgical coal volumes and realizations also declined amid sluggish global steel demand.
• The company raised its full-year cost-of-coal-sales guidance to $103–$107 per ton, citing higher diesel and mining-material costs; a storm-damaged stacker-reclaimer at DTA is expected to constrain operations through the rest of 2026.

Alpha Metallurgical Resources NYSE: AMR reported second-quarter adjusted EBITDA of $25.6 million as metallurgical coal shipment volumes and realizations declined from the prior quarter, while the company lowered its full-year shipment outlook and raised its expected cost of coal sales.

Chief Executive Officer Andy Eidson said the company shipped 3.5 million tons during the second quarter and ended the first half of 2026 with lower volumes and higher costs than it had anticipated. Alpha now expects annual shipments of 14.2 million to 15.4 million tons, reducing the midpoint of its prior outlook by 1 million tons.

The revised guidance reflects weak metallurgical coal markets, lighter shipment performance during the first half and reduced operating efficiency at the Dominion Terminal Associates, or DTA, export terminal, Eidson said.

Storm Damage Affects DTA Operations

One of DTA's two stacker-reclaimer machines sustained significant damage during a June 14 storm, when winds exceeded 80 miles per hour. The terminal has continued moving coal through alternative workflows, but Eidson said its capacity has been reduced and a timeline for returning to full operations has not yet been established.

“The plans for returning the terminal to full operational capacity hinge on many processes that are still underway,” Eidson said. Those processes include work with third-party equipment providers, structural engineers and the terminal's insurance carrier. DTA has filed an insurance claim related to the damage.

Alpha's updated guidance assumes the terminal will remain at its currently reduced operating capacity through the remainder of 2026, according to Eidson. The company also expects to use available throughput at other East Coast terminals to mitigate delays.

During the question-and-answer session, Eidson said Alpha could not yet quantify the eventual utilization level of DTA with one stacker reclaimer or offer a longer-term outlook for 2027. He said repairs and logistics, including moving the damaged equipment for disassembly, remain under development.

Costs Rise Despite Quarterly Improvement

Alpha raised its full-year cost-of-coal-sales guidance to a range of $103 to $107 per ton. Eidson said the midpoint represents a $7-per-ton increase from the company's early estimates, driven primarily by higher costs for diesel, supplies and other mining materials. He cited price volatility associated with the war in Iran as a contributor to increased diesel spending.

For the second quarter, however, metallurgical segment cost of coal sales fell to $103.07 per ton from $107.98 per ton in the first quarter, Chief Financial Officer Todd Munsey said. The company expects elevated costs to be spread across fewer annual tons under the revised guidance.

Eidson said management continues to evaluate its portfolio for operational changes, including schedule adjustments and potential production changes. The company is weighing margins rather than production costs alone when considering which tons may be at risk, he said.

Quarterly EBITDA, Volumes and Pricing Decline

Adjusted EBITDA declined from $30 million in the first quarter to $25.6 million in the second quarter. Sales volumes declined to 3.5 million tons from 3.6 million tons in the prior quarter.

Metallurgical segment realizations averaged $118.71 per ton, compared with $124.39 per ton in the first quarter. Total weighted-average metallurgical sales realizations were $124.30 per ton, down from $128.40 per ton.

• Export metallurgical tons priced against Atlantic indices and other mechanisms realized $109.08 per ton, versus $110.32 per ton in the first quarter.
• Export tons priced against Australian indices realized $143.82 per ton, compared with $144.95 per ton in the prior quarter.
• Incidental thermal sales realizations increased to $79.36 per ton from $69.41 per ton.

As of June 30, Alpha had $307.6 million in unrestricted cash and $30.9 million in short-term investments. Total liquidity was $447.8 million, down from $476.2 million at the end of March. The company had no borrowings under its asset-based lending facility and had $40.7 million in letters of credit outstanding.

Second-quarter capital expenditures were $45.1 million, up from $40.7 million in the first quarter, while cash provided by operating activities increased to $39.9 million from $29 million.

Weak Steel Demand Weighs on Coal Markets

Management said its view of metallurgical coal markets was largely unchanged from the first quarter, with sluggish global steel demand continuing to pressure pricing. Eidson noted that the Australian premium low-volatility, or PLV, benchmark had begun to retreat, narrowing its premium over U.S. East Coast low-volatility coal.

Munsey said the Australian PLV index rose from $236.80 per metric ton on April 1 to $243.50 at June 30, before declining to $214.30 per metric ton as of Aug. 6. U.S. East Coast low-volatility coal was at $188 per ton as of Aug. 6, while high-volatility A and B indices stood at $156 and $146.50 per ton, respectively.

Chief Commercial Officer Dan Horn said increased high-volatility supply has coincided with weaker-than-expected global steel demand. He said Alpha has generally avoided lower-priced spot opportunities and has directed some higher-BTU high-volatility B tons into thermal markets at comparable realizations.

Horn also said Alpha's Wildcat mine is now in production and is expected to ramp during the third and fourth quarters, shifting the company's mix toward more low-volatility coal.

At the midpoint of its 2026 guidance, Alpha said 70% of its metallurgical tonnage is committed and priced at an average of $128.17 per ton. Another 30% is committed but not priced. The thermal byproduct portion of the metallurgical segment is fully committed and priced at an average of $75.94 per ton.

Alpha also recognized 13 West Virginia mines, plants and docks that received 2025 safety awards from the Joseph A. Holmes Safety Association, while its mine rescue teams earned category honors and two overall championships in summer competitions.

About Alpha Metallurgical Resources (NYSE:AMR)

Alpha Metallurgical Resources, Inc NYSE: AMR is a leading pure-play producer of high-grade metallurgical coal, primarily serving the global steelmaking industry. Headquartered in Bristol, Virginia, the company operates multiple underground and surface mining complexes across the central Appalachian and Illinois basins. Its production portfolio focuses on premium raw and semi-soft coking coal products tailored to meet the specifications of steel producers worldwide.

Formed in July 2021 through the spin-out of Contura Energy's metallurgical coal business, Alpha Metallurgical Resources has built a reputation for operational excellence and cost-efficient mining.

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