BRISTOL,
Tenn., Nov. 28, 2022 /PRNewswire/ -- Alpha
Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier
of metallurgical products for the steel industry, today 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 capitalizing 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 $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 15.0 million to
16.0 million metallurgical tons expected to account for the
majority of the company's total shipments of 16.7 million to 18.4
million tons.
"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 percent of
metallurgical tons at the midpoint for the coming calendar
year—this is comprised of 30 percent committed and priced at an
average of roughly $193 per ton and
another 32 percent that is committed but not yet priced."
In terms of expected cost of coal sales, Alpha is guiding to a
range of $106.00 to $112.00 per ton in the Met segment and a range of
$87.00 to $93.00 per ton 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 labor
and supplies.
The company is issuing guidance for selling, general and
administrative costs in a range of $59
million to $65 million for
2023, excluding non-recurring expenses and non-cash stock
compensation. Idle operations expense is expected to be between
$21 million and $31 million. Cash interest expense is projected
in a range of $2 million to
$10 million, and depreciation,
depletion and amortization are anticipated to be between
$115 million to $135 million. Capital expenditures are expected
to be between $250 million and
$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% to 20% for 2023.
"As we mentioned in our most recent earnings call, we have
experienced some challenges in obtaining the specialized contract
labor and supplies for some of the projects that were included in
2022's capital expenditures budget," Eidson said. "Therefore, we
are building in roughly $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 $10.00 per ton for 2023, which,
at the midpoint of our shipment guidance, equates to approximately
$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."
|
2023
Guidance
|
in millions of
tons
|
Low
|
High
|
Metallurgical
|
15.0
|
16.0
|
Thermal
|
1.4
|
1.8
|
Met
Segment
|
16.4
|
17.8
|
All Other
|
0.3
|
0.6
|
Total
Shipments
|
16.7
|
18.4
|
|
|
|
Committed/Priced1,2,3
|
Committed
|
Average
Price
|
Metallurgical -
Domestic
|
|
$193.29
|
Metallurgical -
Export
|
|
$166.00
|
Metallurgical
Total
|
30 %
|
$193.07
|
Thermal
|
64 %
|
$130.05
|
Met
Segment
|
33 %
|
$181.56
|
All Other
|
62 %
|
$88.09
|
|
|
|
Committed/Unpriced1,3
|
Committed
|
|
Metallurgical
Total
|
32 %
|
|
Thermal
|
— %
|
|
Met
Segment
|
29 %
|
|
All Other
|
— %
|
|
|
|
|
Costs per
ton4
|
Low
|
High
|
Met Segment
|
$106.00
|
$112.00
|
All Other
|
$87.00
|
$93.00
|
|
|
|
In millions
(except taxes)
|
Low
|
High
|
SG&A5
|
$59
|
$65
|
Idle Operations
Expense
|
$21
|
$31
|
Cash Interest
Expense
|
$2
|
$10
|
DD&A
|
$115
|
$135
|
Capital
Expenditures
|
$250
|
$280
|
Tax
Rate6
|
15 %
|
20 %
|
Notes:
1
|
Based on committed and
priced coal shipments as of November 16, 2022. Committed percentage
based on the midpoint of shipment guidance range.
|
2
|
Actual average per-ton
realizations on committed and priced tons recognized in future
periods may vary based on actual freight expense in future periods
relative to assumed freight expense embedded in projected average
per-ton realizations.
|
3
|
Includes estimates of
future coal shipments based upon contract terms and anticipated
delivery schedules. Actual coal shipments may vary from these
estimates.
|
4
|
Note: The Company is
unable to present a quantitative reconciliation of its
forward-looking non-GAAP cost of coal sales per ton sold financial
measures to the most directly comparable GAAP measures without
unreasonable efforts due to the inherent difficulty in forecasting
and quantifying with reasonable accuracy significant items required
for the reconciliation. The most directly comparable GAAP measure,
GAAP cost of sales, is not accessible without unreasonable efforts
on a forward-looking basis. The reconciling items include freight
and handling costs, which are a component of GAAP cost of
sales. Management is unable to predict without unreasonable efforts
freight and handling costs due to uncertainty as to the end market
and FOB point for uncommitted sales volumes and the final shipping
point for export shipments. These amounts have historically varied
and may continue to vary significantly from quarter to quarter and
material changes to these items could have a significant effect on
our future GAAP results.
|
5
|
Excludes expenses
related to non-cash stock compensation and non-recurring
expenses
|
6
|
Rate assumes no further
ownership change limitations on the usage of net operating
losses
|
About Alpha Metallurgical Resources
Alpha Metallurgical Resources (NYSE: AMR) is a Tennessee-based mining company with operations
across Virginia and West Virginia. With customers across the
globe, high-quality reserves and significant port capacity, Alpha
reliably supplies metallurgical products to the steel industry. For
more information, visit www.AlphaMetResources.com.
Forward-Looking Statements
This press release includes forward-looking
statements. These forward-looking statements are based on
Alpha's expectations and beliefs concerning future events and
involve risks and uncertainties that may cause actual results to
differ materially from current expectations. These factors are
difficult to predict accurately and may be beyond Alpha's
control. Forward-looking statements in this press release or
elsewhere speak only as of the date made. New uncertainties
and risks arise from time to time, and it is impossible for Alpha
to predict these events or how they may affect Alpha. Except
as required by law, Alpha has no duty to, and does not intend to,
update or revise the forward-looking statements in this press
release or elsewhere after the date this release is issued. In
light of these risks and uncertainties, investors should keep in
mind that results, events or developments discussed in any
forward-looking statement made in this press release may not
occur.
INVESTOR & MEDIA CONTACT: EMILY
O'QUINN
InvestorRelations@AlphaMetResources.com
CorporateCommunications@AlphaMetResources.com
(423) 573-0369
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SOURCE Alpha Metallurgical Resources, Inc.