Published: November 30, 2022 |

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Alpha Metallurgical Resources has released 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,” added Stetson.

We expect 2023 to be a continuation of these efforts as we step up our production expectations and continue investing in our future success,” concluded Stetson.

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,” added Eidson.

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 percent to 20 percent 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,” Eidson added.

“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,” Eidson concluded.

About Alpha Metallurgical Resources
Alpha Metallurgical Resources 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.

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