Alpha Metallurgical Resources, Inc. Q3 FY2025 earnings call

• Cost of coal sales: Q3 saw cost of coal sales at $97.27 per ton, the best since 2021 and back-to-back quarters. - Operations: Continued cost reduction with a 2% increase in tons per man hour for Q3, second quarter in a row of record quarterly cost performance. Progress on Kingston Wildcat mine with slope development complete and in development production. Virginia teams received safety and environmental awards. - Market: Metallurgical coal indexes show softness, global steel demand vulnerable to uncertainty. Logistics issue with CSX train derailment affecting export access, but team working to mitigate.

For the third quarter, adjusted EBITDA was $41.7 million. The met segment had an average realization of $114.94 per ton in Q3, down from $119.43 in Q2. Cost of coal sales for the met segment was $97.27 per ton in Q3, a decrease from $100.06 per ton in Q2. The thermal byproduct portion of the met segment is fully committed and priced at an average of $80.27. Revenue contribution details weren't explicitly broken down beyond the met segment.

• Not ready to issue guidance for 2026 yet; will share once domestic negotiations conclude. - Lowered capital contributions to equity affiliates guidance to a range of $35 million to $41 million, down from prior range of $44 million to $54 million. - 85% of metallurgical tonnage in met segment committed and priced at average $122.57, 13% committed but not yet priced, thermal byproduct fully committed and priced at $80.27 midpoint.

• Market softness: Metallurgical coal indexes reflect softness, global economic conditions impact steel demand. - Geologic risks: Unforeseen geologic problems could occur. - Logistics risk: CSX train derailment on important rail line used for exports, potential impact on shipments if outage prolonged.

Q: How should we think about the sustainability of cost cuts and productivity shift if prices move?

A: Andy noted operations team has done amazing job cutting costs while maintaining safety. Jason mentioned unforeseen geologic problems but mines in better place.

Q: Color on next year's domestic contracts and volume flex?

A: Dan said every year different, steel industry not at full capacity, demand erratic; no precedent of over 1 million ton year-over-year change.

Q: Rare earth opportunities?

A: Work done since 2014, but no material economic impact expected yet.

Q: ETA for CSX line reopening and DTA inventory?

A: Dan said first trains moved through area, expect short duration; had sufficient inventory to serve customers.

Q: How Alpha navigates new met coal supply coming online?

A: Dan said new mines coming online is not new, Alpha is supplier of choice and will deal with market forces.

Q: CapEx expectations in 2026?

A: Charles said ongoing project at Kingston Wildcat mine will have another $40 million-ish spend next year.

Q: M&A opportunities and safety during MSHA shutdown?

A: Charles said interested in supply chain control but M&A tough in current landscape; MSHA shutdown not impacting operations, safety performance driven internally with September and October being strong safety months.