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Alpha announces 2023 full-year operational guidance

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World Coal,

Alpha Metallurgical Resources, Inc., a leading US supplier of metallurgical products for the steel industry, has announced its operational guidance for the 2023 calendar year.

“As we continue working hard to safely wrap up a record-setting year of accomplishments, we are also looking forward to 2023 and what lies ahead for Alpha,” said David Stetson, chair and chief executive officer. “I couldn’t be prouder of our team’s 2022 performance, which includes paying off our term-loan debt and capitalising on market opportunities that allowed Alpha to set and subsequently break a new Adjusted EBITDA record in back-to-back quarters. Additionally, the company has returned over US$500 million to shareholders through share repurchases and dividends. While market conditions unquestionably facilitated these achievements, our performance was also underpinned by focused decision-making and a commitment to strengthening the long-term health of the company. We expect 2023 to be a continuation of these efforts as we step up our production expectations and continue investing in our future success.”

The full-year 2023 guidance introduced by the company includes an increase in shipments from 2022 levels, with 15 million to 16 million tonnes expected to account for the majority of the company’s total shipments of 16.7 million to 18.4 million t.

“We are encouraged by the continued demand in coal markets, and with supply expected to remain tight across the globe for some time to come, we believe Alpha is well positioned to ship more coal in 2023,” said Andy Eidson, Alpha’s president. “Even against a more ambitious guidance range than in 2022, our sales teams have already contracted 62% of metallurgical tonnes at the midpoint for the coming calendar year—this is comprised of 30% committed and priced at an average of roughly US$193/t and another 32% that is committed but not yet priced.”

In terms of expected cost of coal sales, Alpha is guiding to a range of US$106 – 112/t in the Met segment and a range of US$87 – 93/t in the ‘All Other’ category. These ranges reflect an expectation of continued inflationary pressure through the 2023 calendar year, most notably in the areas of labour and supplies.

The company is issuing guidance for selling, general, and administrative costs in a range of US$59 – 65 million for 2023, excluding non-recurring expenses and non-cash stock compensation. Idle operations expense is expected to be between US$21 – 31 million. Cash interest expense is projected in a range of US$2 – 10 million, and depreciation, depletion and amortisation are anticipated to be between US$115 – 135 million. Capital expenditures are expected to be between US$250 – 280 million for the full year, which includes some carryover from 2022, sustaining maintenance capital, and several planned projects to invest in mine development, equipment, and portfolio enhancements. The company expects a tax rate of between 15 – 20% for 2023.

“As we mentioned in our most recent earnings call, we have experienced some challenges in obtaining the specialised contract labour and supplies for some of the projects that were included in 2022’s capital expenditures budget,” Eidson said. “Therefore, we are building in roughly US$33.5 million of carryover capex to the coming year’s guidance. We anticipate that our sustaining, or maintenance, capital needs will be just under US$10/t for 2023, which, at the midpoint of our shipment guidance, equates to approximately US$170 million for the year, which includes both supplemental and technologically advanced safety equipment. The balance of our projected capital spending in 2023 will be for development projects. These projects include development of new mines and enhancements to some of our existing properties to support our broader production and shipment goals for the upcoming year. We are excited about the opportunity to make meaningful investments that are expected to further strengthen the safety and longevity of the Alpha portfolio for many years to come.”

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