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AM

Alpha Metallurgical Resources, Inc. (AMR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was weak: AMR reported a net loss of $33.9M (−$2.60 diluted EPS), Adjusted EBITDA of $5.7M, and total revenues of $532.0M, reflecting depressed met coal indices and severe January–February weather that pressured volumes and costs .
  • Results missed S&P Global consensus on all three: EPS (−$2.60 vs −$1.06), revenue ($532.0M vs $573.2M), and EBITDA ($6.9M vs $28.5M) — a broad-based miss driven by lower realizations and higher costs; management held cost/ton guidance but cut shipment and capex guidance to preserve liquidity (consensus values via S&P Global)* .
  • Guidance: 2025 metallurgical shipments reduced to 13.8–14.8Mt (from 14.5–15.5Mt), thermal to 0.8–1.2Mt (from 1.0–1.4Mt), and capex lowered to $130–$150M (from $152–$182M); met cost/ton guidance maintained at $103–$110 .
  • Liquidity preserved and enhanced: ABL expanded to $225M, maturity extended to May 2029; quarter-end total liquidity was $485.8M and cash $448.0M despite weak cash generation; no Q1 buybacks amid market softness .
  • Likely stock reaction catalysts: the shipment/capex cuts and cautious macro/tariff commentary vs. the positive ABL expansion and maintained cost guidance; narrative hinges on cost execution, demand stabilization, and Kingston Wildcat delivery .

What Went Well and What Went Wrong

  • What Went Well

    • Liquidity defense: Ended Q1 with $485.8M of liquidity, $448.0M cash; expanded ABL to $225M and extended to May 2029, adding flexibility .
    • Cost guidance held despite lower volumes: Management maintained 2025 met cost guidance ($103–$110/ton) by idling higher-cost operations and implementing wage reductions to realign with market conditions .
    • Project continuity: Kingston Wildcat low-vol development remains on schedule with ~75% slope completion and expected development cuts in late 2025; capex trimmed by ~$8M without timeline impact .

  • What Went Wrong

    • Pricing/realizations: Met realization fell to $118.61/ton vs $127.84 in Q4, reflecting deterioration in indices; domestic/export mix and discounted pricing in weak markets weighed on realized prices .
    • Cost pressure and weather: Met cost/ton increased to $110.34 (from $108.82) on severe weather and some geologic challenges; tons sold dropped to 3.758Mt (from 4.062Mt) .
    • Broad miss vs. consensus: EPS, revenue, and EBITDA all missed S&P Global consensus; management reiterated cautious outlook given weak steel demand and tariff/trade uncertainty (consensus via S&P Global)* .

Financial Results

Headline metrics by period (chronologically oldest → newest) and vs S&P Global consensus:

MetricQ1 2024Q3 2024Q4 2024Q1 2025 (Actual)Q1 2025 (Consensus)
Total Revenues ($M)$864.1 $671.9 $617.3 $532.0 $573.2*
Diluted EPS ($)$9.59 $0.29 $(0.16) $(2.60) $(1.06)*
Adjusted EBITDA ($M)$189.6 $49.0 $53.2 $5.7 $28.5*
Tons Sold (M tons)4.365 4.148 4.062 3.758 —
Non‑GAAP Sales Realization ($/ton)$166.68 $132.76 $127.84 $118.61 —
Non‑GAAP Cost of Coal Sales ($/ton)$115.65 $114.27 $108.82 $110.34 —

Consensus values retrieved from S&P Global.*

Segment/pricing detail (Q1 2025):

Met Segment Sales (Q1 2025)Tons Sold (M)Coal Revenues ($M)Realization ($/ton)% of Met Tons
Export – Other Pricing0.985$117.6$119.3929%
Domestic0.806$125.4$155.5423%
Export – Australian Indexed1.662$178.6$107.4448%
Total Met Coal (met only)3.453$421.5$122.08100%
Thermal (by‑product)0.305$24.2$79.39—
Met Segment Total (excl. F&H)3.758$445.7$118.61—

Cash & liquidity KPIs:

KPIQ3 2024Q4 2024Q1 2025
Cash from Operations ($M)$189.5 $56.3 $22.2
Capital Expenditures ($M)$31.5 $42.7 $38.5
Cash & Cash Equivalents ($M)$484.6 (9/30/24) $481.6 (12/31/24) $448.0 (3/31/25)
Total Liquidity ($M)$507.0 (9/30/24) $519.4 (12/31/24) $485.8 (3/31/25)

Consensus vs actual (Q1 2025):

MetricConsensusActualBeat/Miss
Revenue ($M)$573.2*$532.0 Miss
EPS ($)$(1.06)*$(2.60) Miss
EBITDA ($M)$28.5*$6.9 (EBITDA)*/$5.7 Adj. EBITDA Miss

Consensus values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Metallurgical Shipments202514.5–15.5 Mt 13.8–14.8 Mt Lowered
Thermal Shipments20251.0–1.4 Mt 0.8–1.2 Mt Lowered
Total Met Segment Shipments202515.5–16.9 Mt 14.6–16.0 Mt Lowered
Capex2025$152–$182M $130–$150M Lowered (~$27M mid‑point)
Met Cost of Coal Sales ($/ton)2025$103–$110 $103–$110 Maintained
SG&A (ex‑SBC)2025$53–$59M $53–$59M Maintained
Idle Operations Expense2025$18–$28M $18–$28M Maintained
Net Cash Interest Income2025$2–$10M $2–$10M Maintained
DD&A2025$165–$185M $165–$185M Maintained
Capital Contributions to Equity Affiliates (DTA)2025$44–$54M $44–$54M Maintained
Cash Tax Rate20250%–5% 0%–5% Maintained
Committed/Priced (Met)2025 snapshot32% @ $143.81/ton (as of 2/20/25) 50% @ $133.04/ton (as of 5/1/25) Updated mix/pricing snapshot

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
Macro/tariffs/tradeWeak steel demand; tariff uncertainty; 2025 guidance issued (Q3) . Weather/headwinds to Q1 & Q2; tariff shifts monitored (Q4) .Continued depressed steel demand; tariff/trade policy uncertainty; IMF commentary cited; cautious outlook .Cautious/negative macro maintained.
Cost disciplineQ3 cost/ton rose on lower productivity . Q4 raised cost guidance high-end; weather pressures ahead .Maintains $103–$110/ton guidance; idled high-cost ops; wage reductions implemented .Focused on holding cost range despite lower volumes.
Liquidity/ABLLiquidity up Q3; no debt draws .ABL increased to $225M; maturity May 2029; liquidity $485.8M .Balance sheet flexibility enhanced.
Pricing/realizationsRealization: $141.86 (Q2) → $132.76 (Q3) .Realization $118.61; discounting more common in weak markets .Realizations deteriorated further.
Kingston WildcatProgress update; target late‑2025 dev cuts (Q4) .~75% slope completion; late‑2025 dev cuts on track; ~1Mtpa run‑rate in 2026; $8M dev capex reduction .Execution continuing; capex optimized.
DTA terminalPlanned May 2‑week outage (Q4) .Outage underway; expect full utilization by ~May 18; shipment timing risk .Upgrade program progressing; managed disruption.
Capital returnsProgram authorized; no repurchases in Q4 due to softness .No Q1 repurchases; preserving cash; reassess with market turn .Conserving cash through downcycle.
Supply rationalizationDiscussed high-cost tons likely to exit (Q4) .More small operators at risk; some tons could still come out .Potential supply tightening if weakness persists.

Management Commentary

  • “Alpha's first quarter results reflect the challenging market environment... as well as significant impacts... related to severe weather conditions in January and February” — CEO Andy Eidson .
  • “We are pleased to announce the increase in size of our ABL facility from $155 million to $225 million along with an extension... to May of 2029” — CFO Todd Munsey .
  • “We recently idled roughly 500,000 tons of production... [and] announced market-driven pay reductions... to better match our business to the market reality” — President & COO Jason Whitehead .
  • “Metallurgical coal indexes remained depressed... weak steel demand persists, now with increased levels of uncertainty around the impact of tariffs and shifting trade policies... we maintain a cautious outlook for the rest of the year” — CEO Andy Eidson .
  • On pricing mechanics: “In a weak market, there tends to be more discounting against the indices... Not in every case... but we're obviously in a weaker market” — CCO Dan Horn .

Q&A Highlights

  • Cost cadence and guidance: Management emphasized holding the $103–$110/ton cost range despite lower volumes; further portfolio actions remain on the table if needed .
  • Capex cut composition: ~$27M mid-point cut comprised of ~$8M development and ~$19M maintenance; some work brought in‑house to reduce third‑party margins .
  • Domestic vs export mix: Shipment reduction primarily affects export tons; domestic book remains relatively better priced .
  • Pricing behavior: Discounting vs indices more prevalent in weak markets; occasional premiums still achievable depending on product/market .
  • M&A stance and cash posture: Open to opportunities but disciplined given accretion/cash burn risks; maintaining elevated cash until clearer upturn .

Estimates Context

  • Q1 2025 vs S&P Global consensus: Revenue $532.0M vs $573.2M (miss), EPS −$2.60 vs −$1.06 (miss), EBITDA ~$6.9M vs $28.5M (miss). Drivers: lower met realizations ($118.61/ton), weather‑impacted volumes/costs; management maintained cost/ton guidance but cut shipments/capex given macro/tariff uncertainty (consensus via S&P Global)*.
  • Implications: Street models likely to move lower on FY volumes/realizations and near‑term EBITDA; capex cut supports FCF but shipment downgrade trims revenue base .

Consensus values retrieved from S&P Global.*

Key Takeaways for Investors

  • Liquidity first: Elevated cash and expanded/extended ABL ($225M, 2029) provide downside protection through weak pricing; this supports option value on a turn .
  • Cost execution is the swing factor: Holding $103–$110/ton met cost guidance amid lower shipments is critical to stabilizing margins while realizations remain under pressure .
  • Realizations under sustained pressure: Q1 net realization $118.61/ton reflected weaker indices and selective discounting; watch domestic/export mix and index trajectory .
  • Volume/capex reset: 2025 shipments cut to 14.6–16.0Mt total; capex to $130–$150M — a prudent cash‑preserving stance in current macro .
  • Projects still advancing: Kingston Wildcat remains on‑track (late‑2025 development cuts; ~1Mtpa in 2026), with trimmed development spend .
  • Capital returns on hold: No Q1 buybacks; management prioritizes cash until clearer upcycle signals emerge .
  • Trading setup: Near‑term narrative anchored to index/pricing recovery, cost delivery, and signs of supply rationalization; guidance reductions and consensus misses are near‑term headwinds .

Notes:

  • All company figures are from AMR’s Q1 2025 8‑K/press release and earnings call unless otherwise cited. Citations use [document_id:chunk_idx] format.
  • Asterisk (*) denotes values retrieved from S&P Global consensus (no document citation available).