Hallador Energy (HNRG) 12 Nov 242024 Q3 Earnings call transcript

Good afternoon. Thank you for attending Hallador Energy's Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this call may be recorded. I'd now like to turn the conference over to Sean Mansouri, the company's Investor Relations adviser with Elevate IR. Please go ahead, Sean.

afternoon, good and you, everyone. Thank joining We quarter discuss third to results. appreciate you XXXX our us With President today Hargrave. me are CFO, Bilsland; Marjorie and and CEO, Brent afternoon, on the financial Investor Relations quarter a This release Hallador our results press now operating in XXXX is that website. released we and third our outlook. we Today, as discuss market current results those on will conditions well as perspective and our

open remarks, call to we questions. will the prepared Following your answer

to a reminder filings include that some variety remarks and our uncertainties may subject time from with our begin, of forward-looking the are today assumptions statements press today's SEC we in release. a to in risks, of and Before contained reflected also time

on prove those we While may materialize or to currently from uncertainties available one incorrect, vary if materially expected. these or these based us, underlying our actual risks forward-looking or statements results assumptions information or are projected if more of

to forward-looking filing of preliminaries the to In future law the no XX-Q has of or unless required on so. obligation providing to result with And shortly. turn a Form update out way, as by President do any call remarks, We these and new Brent or CEO, Bilsland. I'll whether otherwise, plan publicly revise our over events Hallador the information, statements,

producer joining Thanks, milestone all-important in to for and signing the Sean, center leading developer. thank I'm nonbinding we you, an global a with reached an a our power us happy third independent afternoon. this by everyone, term announce data as quarter, that sheet during transformation

capacity that of with relevant to load working partner is agreements will our to and the end large utilities diligently user. team support Our a delivery this energy and definitive the finalize

for arrangements at stakeholders. a substantial types portion decade. our previously contracts complex, energy extending are we're in involving plant's of long-term for improved we'll discussed, successful we've deals of these agreements, reaching margins, and over As a capacity multiple secure If these multiparty

recent through capacity associated power structures be regulatory that which transaction with have utility our the challenges would involves proposed type. created and a of selling in in-front-of-the-meter reminder, may contrast have this or you As behind-the-meter our deals to cooperative, other that seen

that tax climate successful we transaction a finalizing business-friendly favorable and given center will optimistic are Indiana's policy. We in long-term be data

considerable we believe where remaining X, MISO the a Indiana hold of Kentucky, continues capacity portion and unsold of to We Zone accredited parts grow. demand covering Western in

This continue yet binding that solar. response reduced by encouraged needs we and in potential we've While through has resources and the global reached the from and gas counterparties other date. Further, continues intermittent progress we believe capacity the partner to not are selected We accredited energy resources it constraint to this strategic restricted. than accredited we our with we a challenging for are to and and like other highly progress nuclear. to makes offerings. to from supply have the agreements, market wind be the capacity have strong the experienced the with MISO see coal, interest awarded market and accreditation meet pleased capacity made partner capacity

suppliers we to facing has foreseeable minimal constrained remain further response the part into the an environmental due to accredited provide Each of projects. that and projects regulatory dispatchable capacity of these capacity the for of wind that delaying have all generation our by been accredited essential likely belief is overwhelming accredited from queue muted, influx supply contributes and capacity, is access challenges including response future. factors valuable generation, the Additionally, solar limited This dispatchable and in gas. types to

and our we how continue Now capacity that MISO and to awards. recently has accredited impact capacity evaluate the may change is calculated way sought in future which to awarded,

coming we expect years. with what we in does the have sentiment value the be to our this what respect However, not or of awarded change to

the the to results Turning quarter. for

wholly owned from quarter. million Hallador hours megawatt the Power second in up Our X.X megawatt hours XXX,XXX subsidiary, in QX, generated

quarter, improvements remains incremental remains during are their that Even gas towards While environment weak, challenging, energy rates. the our based we're we inventory and on the encouraged though levels pricing saw higher historic returning stronger dispatch norms. pricing

with plant PPA, power in to which is end, global hour compared customer improved our second material quarter asset QX. our the to to the management per ran frequently this gross Additionally, in our million increase million the purchase prepaid more PPA agreement, executed other and we thus on Power heels factors we segment a in power quarter, Subsequent an $X.XX to in $XX.XX a This sold significantly. for led cost signed $XX a quarter. $XX megawatt or industry, existing of margin

while of restructuring deals to the operations our negotiations near-term initiative in an positioning the support of types Coal In QX. company we our operations, advancing continue division, described of our long-term earlier. continue the make with launched agreement to Sunrise we progress mining we These

operating for all bringing to split X and most system, our efficiency project costs mine. operational helps a improve completed the productive we at quarter, error third of the units to which reduce a During units,

coal still believe optimizations increase help the cost we projects the have the man-hour we is per will implemented will early, the of tons mine. while it restructuring decreasing While with ton of coal mined that we in connection the per

presents data energy We demand industrial financial from term. our of about believe the and our the opportunity other meaningful enthusiastic positioning. the and we're the long strategic to centers surge a users profile Overall, transform in over markets direction

now remarks. call strengthened opening returning Q&A for the both for are an hand ahead coal and closing on improving and multiyear capitalize we environment to equipped to power and the before us. I opportunity over Hargrave well balance sales, growth the Margie sheet With of will

Brent, a million we segment much, financials in and period, in On to quarter basis, in our our million quarter million production the more by year for $XX.X year. to QX everyone. $XX.X a to million coal loss the revenue of and sales $XX.X million QX for $XXX.X million a prior used quarter and for the the for $XXX consolidated from the of QX afternoon, deferred of income million in part $XXX.X Coal with were cash year division sales of On environment cash our million as period. to third in the prior in were $XX.X generated while Sunrise our compared very prior and $XX.X detail. favorable period. This good was basis, announced QX the by the the decline $X.X a million compared compared you million year Reviewing $XX.X year $XX.X QX and prior the year-over-year year in $XX.X the period. less in reduce Thank decision more for driven to quarter as in restructuring expected was the of the electric net earlier period. Net to prior million in period, coal and $XX.X million $XX.X in $XX.X was million driven compared this operating income for Operating quarter coal net and flow in year QX quarter ago million compared million decline

invested QX in year-to-date non-GAAP the expenditures EBITDA, during a QX the which press Adjusted compared prior to period. reconciled total was We $XX.X release million million quarter, capital third million measure, $X.X today, a is to $XX.X CapEx issued $XX.X in and $X.X bringing in negative earnings earlier year for in million. million our

at QX compared energy capacity sales, compared $XXX.X to with million to more the signed sales PPA total as of $XXX in as of our XXXX. the and our fuel XX, forward These book sales include do When billion end combined end than forward results of of the $X.XX million As was XX, million $XXX.X was the XXXX, forward $XXX.X XX, as our October. $X.XX of were billion QX, $XXX.X we and up to million not position end to million at million September and September September QX XX, $XX of XXXX, of which XXXX. XX% September compared

focused for environment balance challenging strengthening pricing our more spot on we the to response this sheet. year, In

pay During end million quarter, at October end, PPA to Subsequent down from year. which to our the last pursue $XX.X debt revolver, reduced quarter to end debt facility the we outstanding credit $XX.X balance our to us our to $XX million million further additional $XX allowed covenant the utilized the proceeds and provide our we prepaid liquidity. a million to to $XX relief, of third down short-term total bank of compared modified million the at bank term pay which balance of

our use not of the $XX.X did third was quarter the several at program million. we in XXXX, in or the since ATM liquidity September XX, Importantly, the quarter. end weeks Total

October, and last at solid ahead. creating to month in sheet, $XX end million. of foundation expansion for years the total $XX.X growth million the strategic substantial actions we Through liquidity the a Hallador we are these margin balance strengthen was our our position signed to PPA Following

remarks. prepared concludes That our

questions. for call the open you. now will We Thank

Our first line B. of question Pipes from comes from Lucas the Riley.

follow term of points progress the and on to I sheet, that's wanted nonbinding on great congratulations to a see. there. up Brent, few a signing just

very The is We be possible mentioned this the be if assume a of I of that first pricing appreciate You of your much output? is to be above the there, above side, any the should payments would thoughts how of this. it maybe But way to to magnitude of that majority. I XX%, kind the on this it's -- curve XX% what quantify it's about far from mentioned the very quantify the you capacity there's curve. plant's thinking is the would agreement? then package. XX%, separate of is, included way would quantify kind we part on And the and much would appreciated. And kind

Yes.

majority very output is of pricing Because this of get okay, question output as they is, that the is a gets the energy? significant. far wholesale came for And deal we is of around have complex, And some be the of Does pricing. questions far price was that like would price priced it capacity? as that to the as other the I deal that volume lot the or the announced. of right? goes, say, it it people the So number, -- that include be when plant, plant, well, as always to going first And

-- to apples-to-apples. in that case the paid the in proposing? like it's fees include it's that So little we're of to of Does in front utility case kind meter, cooperative compare hard or the a a

other think seen are feel priced and that be the going the to deals that is curve. priced, we've feel we the above we market. We've we're where or said it's what repeatedly above I within curve

remind could my us echo could curve -- is there's could sorry, That lot be I'm us would the where Brent, remind side. helpful. you you benchmark? where But Brent, a of on a you -- as

that, where where we mid-XXs. will be this still above curve said the It's feel we first originally -- priced fallen felt was I above the little But a was. since said we curve When then. in Yes. think the it's we

can PPA? signed, release, does I the remind you this That's that power side that it agreement? And on us cover? what of you on hedge What is position top Or would on your include the helpful. the at in years that And then separate would be and that? the PPA magnitude the when of look

technically we quarter, Yes. quarter. prepayment subsequent did No, in million a third the to fourth so the $XX

And for so that in our subsequent And and XXXX sold years XXXX. events. you'll power and see Q in is it

were in some sold electricity 'XX sold there power So in and 'XX. or powers some

That's helpful. the And to turning coal then side.

to missed if Sorry earlier you efficiency the kind year? you quarter kind cost from this restructuring standpoint? this to you've ton the that productivity a up forward what production but per do And remind I or the what cost of the side coal can look of else outlined and coal were stacks plan and it, on how during me

Yes.

week, those the we're were had we still we going do We elevated. system. to and mine split in shut work, lot costs a around July So error down seeing particularly a did for where be a of

don't quarter So I on with costs really splitting in that just reflective feel the were noise that because of our error. like going the

I about we're is excited say, average by, is is we're encouraged our shift seeing What foot should -- per increasing. or

hour So improving. our tons per man is

million cut tons And our I but cost were significantly, think And ago. where we our back into right? Hallador, again, so we annually structure we've doing a it it's -- year was. mean volumes getting historically X.X the XXs

Sunrise we power is is, Hallador And people really role is to Now support I almost where time in we're side Power really at and support doing business think -- at. tell more the what is going X.X it's plant. this so to of a the the be

work feel we we certainly a third of coal there in for that make certain sell other because Now qualities And better. premium typically coals in coal get we do out the and help that parties. market well to work our so plants

kind we that's the So where of business. see

for This call. does at Thank showing currently and participating, time. this you further conclude I'm And disconnect. today's no you conference now questions may