Alpha Metallurgical Resources, Inc. Q4 FY2024 earnings call

• CEO Andy Eidson: Discussed deteriorating metallurgical coal market due to weak global steel demand and extreme weather impacts, increased cost of coal sales guidance range, took action to prepare business and balance sheet earlier, open to M&A for long-term strength but no current announcements. - CFO Todd Munsey: Shared quarterly financial results, adjusted EBITDA, shipment and cost guidance changes, committed position details, and stock buyback status. - COO Jason Whitehead: Announced Best in Class Awards renamed in honor of previous Chairman/CEO, highlighted operations' safety, environmental, and productivity performance, updated on Kingston Wildcat Slope development and Q1 weather impacts on operations. - Dan Horn: Talked about metallurgical coal market index movements, steel demand influence, weather-related shipment bottlenecks, and planned outage at DTA in May.

For the fourth quarter, adjusted EBITDA was $53 million, up from $49 million in Q3. Sold 4.1 million tons in Q4, same as Q3. Net segment realizations decreased quarter over quarter: average fourth quarter realization was $127.84 vs $132.76 in Q3. Export met tons priced against Atlantic and other mechanisms realized $122.24 per ton in Q4 vs $129.31 in Q3; export coal priced on Australian indices realized $124.71 per ton in Q4 vs $128.61 in Q3. Metallurgical sales cost per ton in Q4 was $108.82 vs $114.27 in Q3; incidental thermal portion in Met segment was $75.39 per ton in Q4 vs $76.33 in Q3. Annual metallurgical shipment volume guidance reduced by 500,000 tons to 14.5 - 15.5 million tons. Cost of coal sales guidance range increased to $103 - $110 per ton from prior $103 - $108. 32% of metallurgical tonnage in Met segment committed and priced at avg $143.81; 56% committed but not yet priced; thermal byproduct portion 95% committed and priced at midpoint $80.74.

• Reduced annual metallurgical shipment volume guidance by 500,000 tons to 14.5 - 15.5 million tons. - Increased high end of met cost of coal sales guidance to $110 per ton, widening range to $103 - $110. - 32% of metallurgical tonnage in Met segment committed and priced at avg $143.81; 56% committed but not yet priced; thermal byproduct portion 95% committed and priced at midpoint $80.74. - No share repurchases in Q4; remaining stock buyback authorization permits ~$400 million in additional repurchases contingent on cash flow and market conditions.

• Metallurgical coal market negatively impacted by weak global steel demand and extreme weather, affecting first and possibly second quarters. - Some small operators in the industry have filed for bankruptcy, industry volatility intensified in down markets. - Uncertainty around tariffs affecting metallurgical coal trade flows and costs. - Weather conditions caused bottlenecks in production, rail transport, and loading, impacting shipments and quarterly results.

Q: How should we think about the cadence of sales as we go through the quarters in 2025?

A: Dan Horn said domestic shipments should be roughly pro rata, export side likely more in back half with accordion effect on shipments, expecting steel demand to improve towards back half with more spot demand and shipments.

Q: Can we get a breakdown of cost per ton guidance increase between lower shipments to purchase coal and difficult weather to start the year?

A: Andy Eidson said it's hard to break down, only increased upper range $2 as a fudge factor, with some cost impacts seen in January and expecting impact from February, giving breathing room for guidance.

Q: Cash was $480 million, is this the level we should expect if market remains weak and how does this square with share repurchases?

A: Andy Eidson said target has been to warehouse cash, in $400 - $500 million range, and will continue managing to cash rather than other situations, not interested in share repurchase activity until market trends improve.

Q: Any color on marginal cost and supply out of central app?

A: Andy Eidson said seen some tons out of market, cost curve not holding as expected, more pressure on smaller operators with higher costs likely exiting, marginal cost becoming an issue in Central Appalachia