Hallador Energy Co (HNRG) 2024 Q3 法說會逐字稿

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.

午安.感謝您參加 Hallador Energy 2024 年第三季財報電話會議。（操作員說明）謹此提醒，此通話可能會被錄音。

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.

我現在想將會議轉交給 Sean Mansouri，他是該公司 Elevate IR 的投資者關係顧問。請繼續，肖恩。

Thank you, and good afternoon, everyone. We appreciate you joining us to discuss our third-quarter 2024 results. With me today are President and CEO, Brent Bilsland; and CFO, Marjorie Hargrave. This afternoon, we released our third-quarter 2024 financial and operating results in a press release that is now on the Hallador Investor Relations website. Today, we will discuss those results as well as our perspective on current market conditions and our outlook. Following prepared remarks, we will open the call to answer your questions.

謝謝大家，大家下午好。我們感謝您與我們一起討論我們的 2024 年第三季業績。今天與我在一起的有總裁兼執行長 Brent Bilsland；財務長馬喬裡·哈格雷夫。今天下午，我們在新聞稿中發布了 2024 年第三季財務和營運業績，該新聞稿現已發佈在 Hallador 投資者關係網站上。今天，我們將討論這些結果以及我們對當前市場狀況和前景的看法。在準備好發言後，我們將召開電話會議來回答您的問題。

Before we begin, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the SEC and are also reflected in today's press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected.

在我們開始之前，請注意，我們今天的一些言論可能包括前瞻性陳述，這些陳述受到我們不時向SEC 提交的文件中包含的各種風險、不確定性和假設的影響，並且也反映在今天的新聞稿中。雖然這些前瞻性陳述是基於我們目前掌握的信息，但如果這些風險或不確定性中的一項或多項成為現實，或者如果我們的基本假設被證明是不正確的，則實際結果可能與我們預測或預期的結果有重大差異。

In providing these remarks, Hallador has no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise unless required by law to do so. We plan on filing our Form 10-Q shortly. And with the preliminaries out of the way, I'll turn the call over to President and CEO, Brent Bilsland.

在發表這些言論時，哈拉多沒有義務公開更新或修改任何前瞻性陳述，無論是由於新資訊、未來事件或其他原因，除非法律要求這樣做。我們計劃很快提交 10-Q 表格。預賽結束後，我將把電話轉給總裁兼執行長布倫特·比爾斯蘭 (Brent Bilsland)。

Thanks, Sean, and thank you, everyone, for joining us this afternoon. I'm happy to announce that during the third quarter, we reached an all-important milestone in our transformation as an independent power producer by signing a nonbinding term sheet with a leading global data center developer. Our team is working diligently to finalize definitive agreements with this partner and the relevant utilities that will support the delivery of our energy and capacity to a large load end user.

謝謝肖恩，也謝謝大家今天下午加入我們。我很高興地宣布，在第三季度，我們與一家領先的全球資料中心開發商簽署了一份不具約束力的條款清單，在我們作為獨立電力生產商的轉型中達到了一個非常重要的里程碑。我們的團隊正在努力與該合作夥伴和相關公用事業公司敲定最終協議，以支持我們向大負載最終用戶提供能源和容量。

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

正如我們之前討論的，這些類型的交易是複雜的、涉及多個利害關係人的多方安排。如果我們成功達成這些協議，我們將以更高的利潤率獲得工廠大部分能源和產能的長期合同，為期十多年。

As a reminder, our proposed in-front-of-the-meter transaction involves selling our power and capacity through utility or cooperative which would be in contrast to the behind-the-meter structures that have created recent regulatory challenges that you may have seen associated with other deals of this type. We are optimistic that we will be successful in finalizing a long-term data center transaction given Indiana's business-friendly climate and favorable tax policy.

提醒一下，我們提議的表前交易涉及透過公用事業或合作社出售我們的電力和容量，這與表後結構形成鮮明對比，表後結構最近造成了您可能已經看到的監管挑戰與此類的其他交易相關。鑑於印第安納州有利於商業的氣候和優惠的稅收政策，我們樂觀地認為我們將成功完成長期資料中心交易。

We believe we hold a considerable portion of the remaining unsold accredited capacity in MISO Zone 6, covering Indiana and parts of Western Kentucky, where demand continues to grow. While we have not yet reached binding agreements, we are encouraged by the progress with this partner and the strong interest we continue to see from other potential counterparties in our energy and capacity offerings. We believe we have selected a highly strategic and experienced global partner and are pleased with the progress that we've made to date.

我們相信，我們擁有 MISO 6 區剩餘未售出認可產能的相當大一部分，涵蓋印第安納州和西肯塔基州的部分地區，這些地區的需求持續增長。雖然我們尚未達成具有約束力的協議，但我們對該合作夥伴所取得的進展以及我們繼續看到其他潛在交易對手對我們的能源和產能產品表現出濃厚興趣感到鼓舞。我們相信我們選擇了一個高度策略性且經驗豐富的全球合作夥伴，並對我們迄今為止所取得的進展感到滿意。

Further, the supply response from the accredited capacity market continues to be restricted. MISO has reduced the capacity accreditation awarded to intermittent resources like wind and solar. This constraint makes it challenging for the market to meet accredited capacity needs through resources other than coal, gas and nuclear.

此外，認可容量市場的供應反應持續受到限制。MISO 減少了對風能和太陽能等間歇性資源的容量認證。這種限制使得市場很難透過煤炭、天然氣和核能以外的資源來滿足認可的產能需求。

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

此外，經過認證的容量供應商的反應一直很冷淡，部分原因是包括天然氣在內的所有類型的可調度發電所面臨的監管和環境挑戰。這種有限的供應響應進一步受到太陽能和風能項目湧入的限制，這些項目提供的認可容量極小，導致隊列不堪重負，並延遲了重要可調度發電項目的進入。所有這些因素都使我們相信，我們擁有的認可能力在可預見的未來可能仍然有價值。

Now MISO has recently sought to change the way in which accredited capacity is calculated and awarded, and we continue to evaluate how that may impact our future capacity awards. However, this does not change our sentiment with respect to the value of what we have or what we expect to be awarded in the coming years.

現在，MISO 最近試圖改變計算和授予認可能力的方式，我們將繼續評估這可能如何影響我們未來的能力授予。然而，這並沒有改變我們對我們所擁有的價值或我們期望在未來幾年獲得的東西的看法。

Turning to the results for the quarter. Our wholly owned subsidiary, Hallador Power generated 1.1 million megawatt hours in Q3, up from 800,000 megawatt hours in the second quarter. While the energy environment remains challenging, during the quarter, we saw incremental improvements based on stronger pricing and higher dispatch rates. Even though our pricing remains weak, we're encouraged that gas inventory levels are returning towards their historic norms.

轉向本季的業績。我們的全資子公司 Hallador Power 第三季發電量為 110 萬兆瓦時，高於第二季的 80 萬兆瓦時。儘管能源環境仍然充滿挑戰，但在本季度，我們看到了基於更強勁的定價和更高的調度率的逐步改善。儘管我們的定價仍然疲軟，但我們對天然氣庫存水準正在恢復到歷史正常水準感到鼓舞。

Additionally, our power plant ran more frequently this quarter, thus our cost improved significantly. This and other factors led to a material increase in gross margin for our Power segment to $16.36 per megawatt hour sold compared to $8.11 in Q2. Subsequent to quarter end, we executed a $60 million prepaid power purchase agreement, or PPA, with an existing customer in the global asset management industry, which is on the heels of a $45 million PPA we signed in the second quarter.

此外，本季我們的電廠運作更加頻繁，因此我們的成本顯著改善。這一因素和其他因素導致我們電力部門的毛利率大幅上升，從第二季的每兆瓦時 8.11 美元增加到 16.36 美元。季度末後，我們與全球資產管理行業的現有客戶簽署了 6000 萬美元的預付費購電協議（PPA），此前我們在第二季度簽署了 4500 萬美元的 PPA。

These types of deals support our near-term operations while positioning the company to continue advancing negotiations of the long-term agreement we described earlier. In our Sunrise Coal division, we continue to make progress with the restructuring of our mining operations, an initiative we launched in Q1. During the third quarter, we completed a project for 4 of our most productive units, bringing all operating units to a split error system, which helps to improve efficiency and reduce operational costs at the mine. While it is still early, we believe the optimizations projects we have implemented in connection with the restructuring will help increase the tons of coal mined per man-hour while decreasing the cost per ton of the coal that we will mine.

這些類型的交易支持我們的近期運營，同時使公司能夠繼續推進我們之前描述的長期協議的談判。在我們的日出煤炭部門，我們在第一季啟動的採礦業務重組方面繼續取得進展。第三季度，我們完成了 4 個生產力最高的單位的項目，將所有營運單位納入錯誤分割系統，這有助於提高礦場的效率並降低營運成本。雖然現在還為時過早，但我們相信我們實施的與重組相關的優化項目將有助於增加每工時開採的煤炭噸數，同時降低我們開採的每噸煤炭的成本。

Overall, we're enthusiastic about the direction of the energy markets and our strategic positioning. We believe the surge in demand from data centers and other industrial users presents a meaningful opportunity to transform our financial profile over the long term. With the strengthened balance sheet and an improving environment for both coal and power sales, we are well equipped to capitalize on the multiyear growth opportunity ahead of us.

整體而言，我們對能源市場的方向和我們的策略定位充滿熱情。我們相信，資料中心和其他工業用戶的需求激增為我們長期的財務狀況轉變提供了有意義的機會。隨著資產負債表的增強以及煤炭和電力銷售環境的改善，我們已做好充分準備，充分利用擺在我們面前的多年增長機會。

I will now hand the call over to Margie Hargrave before opening Q&A and returning for closing remarks.

現在我將把電話轉給瑪吉·哈格雷夫，然後開始問答並返回閉幕詞。

Thank you very much, Brent, and good afternoon, everyone. Reviewing our third-quarter financials in more detail. On a segment basis, electric sales for the quarter were $71.7 million compared to $59.4 million in Q2 and $67.4 million in the prior-year period, while coal sales were $48.3 million for the quarter compared to $45.7 million in Q2 and $134.4 million in the prior-year period.

非常感謝你，布倫特，大家下午好。更詳細地回顧我們第三季的財務狀況。按部門劃分，本季電力銷售額為7,170 萬美元，第二季為5,940 萬美元，上年同期為6,740 萬美元；煤炭銷售額為4,830 萬美元，第二季為4,570 萬美元，上年同期為1.344 億美元。

This expected year-over-year decline was driven by our decision to reduce our coal production as part of the restructuring of our Sunrise Coal division as announced earlier this year. On a consolidated basis, we generated $105 million for the quarter compared to $93.5 million in Q2 and $165.8 million in the prior-year period.

這一預期同比下降是由於我們決定減少煤炭產量，這是今年稍早宣布的日出煤炭部門重組的一部分。在合併基礎上，我們本季創造了 1.05 億美元的收入，而第二季為 9,350 萬美元，去年同期為 1.658 億美元。

Net income for the quarter was $1.6 million compared to a net loss of $10.2 million in Q2 and net income of $16.1 million in the prior-year period. Operating cash used for the quarter was $12.9 million compared to operating cash flow of $23.5 million in Q2 and $35.3 million in the prior year period, with the decline driven by less deferred revenue from Q2 and a more favorable environment for coal in the year-ago period.

本季淨利為 160 萬美元，而第二季淨虧損為 1,020 萬美元，去年同期淨利為 1,610 萬美元。本季使用的營運現金為 1,290 萬美元，而第二季的營運現金流為 2,350 萬美元，去年同期為 3,530 萬美元，下降的原因是第二季遞延收入減少以及去年同期煤炭環境更加有利時期。

Adjusted EBITDA, a non-GAAP measure, which is reconciled in our earnings press release issued earlier today, was $9.6 million for Q3 compared to a negative $5.8 million in Q2 and $35.9 million in the prior year period. We invested $11.6 million in capital expenditures during the third quarter, bringing total year-to-date CapEx to $39.6 million.

調整後EBITDA（一項非GAAP 衡量標準）已在我們今天早些時候發布的收益新聞稿中進行了調整，第三季度調整後EBITDA 為960 萬美元，而第二季度為負580 萬美元，上年同期為負3,590 萬美元。第三季我們投資了 1,160 萬美元的資本支出，使年初至今的資本支出總額達到 3,960 萬美元。

As of September 30, 2024, our forward energy and capacity sales position was $616.9 million compared to $664.1 million at the end of Q2 and $516 million as of September 30, 2023. When combined with our forward fuel sales, which were up more than 50% to $320.3 million compared to the end of Q2, our total forward sales book as of September 30, 2024, was $1.42 billion compared to $1.37 billion at the end of Q2 and $942.1 million as of September 30, 2023. These results do not include the $60 million PPA we signed in October.

截至 2024 年 9 月 30 日，我們的遠期能源和產能銷售部位為 6.169 億美元，而第二季末為 6.641 億美元，截至 2023 年 9 月 30 日為 5.16 億美元。加上我們的遠期燃油銷售（與第二季末相比成長了50% 以上，達到3.203 億美元），截至2024 年9 月30 日，我們的遠期銷售總額為14.2 億美元，而第二季末為13.7 億美元，截至 2023 年 9 月 30 日為 9.421 億美元。這些結果不包括我們 10 月簽署的 6,000 萬美元的購電協議。

In response to the more challenging environment for spot pricing this year, we focused on strengthening our balance sheet. During the third quarter, we modified our credit facility to provide short-term covenant relief, which allowed us to pursue additional liquidity. Subsequent to the quarter end, we utilized $20 million of the proceeds from our $60 million prepaid PPA to further pay down bank term debt and $34 million to pay down our revolver, which reduced our total bank debt to a $23.5 million balance at the end of October compared to $91.5 million balance outstanding at the end of last year.

為了因應今年更具挑戰性的現貨定價環境，我們專注於加強了資產負債表。在第三季度，我們修改了信貸安排以提供短期契約減免，這使我們能夠尋求額外的流動性。季度末後，我們利用 6,000 萬美元預付 PPA 收益中的 2,000 萬美元進一步償還銀行定期債務，並利用 3,400 萬美元償還我們的左輪手槍，這將我們的銀行債務總額減少到 2,350 萬美元。償餘額為9,150 萬美元，去年年底則為9,150 萬美元。

Importantly, we did not use our ATM program in the third quarter or in the several weeks since the end of the quarter. Total liquidity at September 30, 2024, was $34.9 million. Following the $60 million PPA we signed last month at the end of October, our total liquidity was $53.8 million. Through these strategic actions to strengthen our balance sheet, we are creating a solid foundation to position Hallador for substantial growth and margin expansion in the years ahead.

重要的是，我們在第三季或季末以來的幾週內沒有使用 ATM 程式。截至 2024 年 9 月 30 日的流動資金總額為 3,490 萬美元。繼上個月 10 月底簽署 6,000 萬美元的購電協議後，我們的總流動資金為 5,380 萬美元。透過這些加強資產負債表的策略行動，我們正在為 Hallador 在未來幾年實現大幅成長和利潤率擴張奠定堅實的基礎。

That concludes our prepared remarks. We will now open the call for questions. Thank you.

我們準備好的演講到此結束。我們現在開始提問。謝謝。

Lucas Pipes, B. Riley.

派普斯 (Lucas Pipes)，B. 萊利 (B. Riley)。

Brent, congratulations on the progress of signing a nonbinding term sheet, and that's great to see. I just wanted to follow up on a few points there. The first is, is it possible to maybe quantify the magnitude of this agreement? You mentioned it's the majority. We -- should we be thinking about 50%, 60%, 70% of the plant's output? And any way to quantify that would be very much appreciated.

布倫特，恭喜您在簽署不具約束力的投資意向書方面取得進展，很高興看到這一點。我只是想跟進其中的幾點。第一個問題是，是否有可能量化該協議的規模？你提到這是大多數。我們——我們應該考慮工廠產量的 50%、60%、70% 嗎？任何量化的方式都將非常感激。

And then on the pricing side, you mentioned it's above the curve. I would assume this is separate from the capacity payments that would be part of the package. But if there's a way to quantify how far above the curve and what is included there, I would very much appreciate your thoughts on this.

然後在定價方面，您提到它位於曲線之上。我認為這與套餐中的容量付款是分開的。但如果有一種方法可以量化曲線上方的距離以及其中包含的內容，我將非常感謝您對此的想法。

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

是的。因此，就工廠的產量而言，它將佔工廠產量的大部分，意義重大。就定價而言，我們收到了許多有關定價的問題。它變得非常複雜，對吧？因為人們說，好吧，它的定價是否會像這筆交易或已宣布的其他交易一樣。我一直有的第一個問題是，好吧，當他們談到這個數字時，這個價格是能源的批發價格嗎？這包括容量嗎？

Does that include fees paid to a utility in the case -- or cooperative in the case that it's in front of the meter, like we're proposing? So it's a little hard to kind of compare apples to apples. I think we've said repeatedly that it's going to be priced above the curve or what we feel is above the curve. We've seen where the other deals are priced, and we feel that we're within market.

這是否包括在這種情況下向公用事業公司支付的費用——或者在它位於電錶前面的情況下的合作費用，就像我們建議的那樣？因此，將蘋果與蘋果進行比較有點困難。我想我們已經反覆說過，它的定價將高於曲線或我們認為高於曲線的價格。我們已經了解了其他交易的定價，我們認為我們處於市場範圍內。

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

布倫特，你能提醒我們在哪裡嗎——抱歉，我這邊有很多迴響。但是布倫特，你能提醒我們作為基準的曲線在哪裡嗎？那會有幫助的。

Yeah. When we first said that, we felt the curve was in the mid-50s. It has fallen a little since then. But I think we still feel it's above where -- this will be priced above where we originally said the curve was.

是的。當我們第一次這麼說時，我們覺得曲線在 50 年代中期。從那時起，它已經下降了一點。但我認為我們仍然認為它高於——這將高於我們最初所說的曲線的價格。

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

這很有幫助。關於您簽署的購電協議，您能否提醒我們協議的規模有多大？涵蓋哪些年份？當我在新聞稿中查看你們在電力方面的對沖頭寸時，這是否包括購電協議？或者說這會是分開的並且是最重要的？

Yeah. No, so we did a $60 million prepayment subsequent to the third quarter, technically in the fourth quarter. And so you'll see it in our Q and subsequent events. And that is for power sold in years 2025 and 2026. So there were some power sold in '25 and some powers or electricity sold in '26.

是的。不，所以我們在第三季之後預付款了 6000 萬美元，嚴格來說是在第四季度。所以你會在我們的問題和後續活動中看到它。這是 2025 年和 2026 年售出的電力。因此，25 年出售了一些電力，26 年出售了一些電力或電力。

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

這很有幫助。然後轉向煤炭這邊。抱歉，如果我錯過了，但您能否提醒我本季每噸煤炭生產成本是多少，以及這與您今年早些時候概述的效率和重組計劃有何關係？從成本或生產力的角度來看，您對煤炭方面還有什麼期待？

Yeah. So we're still seeing those costs be elevated. We did do a lot of work, particularly in July around where we had the mine shut down for a week, and we were going to a split error system. So I really just don't feel like our costs were that reflective in the quarter because of that noise going on with splitting the error.

是的。因此，我們仍然看到這些成本正在上升。我們確實做了很多工作，特別是在 7 月份，我們將礦井關閉了一周，我們將採用分裂錯誤系統。因此，我真的不認為我們的成本在本季度有那麼大的反映，因為分割錯誤時出現了噪音。

What we're excited about is or encouraged by, I should say, is we're seeing our average foot per shift is increasing. So our tons per man hour is improving. And so we think it's getting our cost structure back into the 40s where it historically was. And -- but again, Hallador, we've cut our volumes significantly, right? I mean, we were doing 6.5 million tons annually a year ago, now we're doing 3.5. And so I think what we tell people is the Hallador Power side of the business is really where it's going to be at. And Sunrise really is almost more in a support role at this time to support the power plant.

我應該說，我們感到興奮或受到鼓舞的是，我們看到每班的平均英尺數正在增加。因此，我們的每小時噸數正在增加。因此，我們認為這將使我們的成本結構回到 40 年代的歷史水平。而且——但哈拉多，我們已經大幅削減了產量，對吧？我的意思是，一年前我們每年生產 650 萬噸，現在我們生產 3.5 噸。因此，我認為我們告訴人們的是 Hallador Power 業務的真正所在。而Sunrise此時確實幾乎更多的是扮演一個輔助角色，為電廠提供支援。

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

現在我們確實向第三方出售煤炭。我們認為，我們之所以獲得溢價，通常是因為我們的煤炭品質在某些工廠中表現良好，並有助於使市場上的其他煤炭更好地發揮作用。這就是我們所看到的業務。

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

目前我沒有提出任何進一步的問題。今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接。