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Alliance Resource Partner sees strong demand for coal in 2023 as energy dynamics shift in Europe

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Alliance Resource Partners LP
stock is up 12% in premarket trades on Monday after the coal producer said it set a record for fourth-quarter revenue and profit, and announced a $72.3 million acquisition. Tulsa, Okla, company said its 2023 expected coal sales volumes are about 94% committed and priced above 2022 per ton levels. It also increased its unit repurchase program to $100 million. “Europe’s shift from Russian energy and U.S. and its allies’ economic sanctions are lowering Russian supply to the world, changing global energy trade routes and energy markets for several years to come, if not permanently. U.S. natural gas and coal exports should benefit in 2023 and beyond,” said Alliance Global Resources CEO Joseph W. Craft III. Alliance Resource Partners said its fourth-quarter net income rose by about four times to $214.45 million, or $1.63 per unit, from $51.83 million, or 40 cents a share, in the year-ago quarter. Fourth-quarter revenue rose to $700.73 million from $473.47 million in the year-ago quarter. Alliance Resource Partners beat the Wall Street earnings forecast of $1.43 per unit and also beat the revenue forecast of $688.1 million, according to estimates compiled by FactSet. Prior to Monday’s move, shares of Alliance Resource Partners have risen 1.9% in 2023, compared to an 11% rise by the Nasdaq
The stock rose in after hours trades on Friday after the company said it increased its quarterly cash distribution rate to 70 cents per unit, or $2.80 per unit annualized, up 40% from the last quarter. The company said a conflicts committee comprised of independent members of its board of directors OK’d the acquisition of 2,682 acres of net oil and gas royalty acres in the Permian Basin from JC Resources LP, an entity owned by CEO Craft, for $72.3 million.


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