What happened
Alliance Resource Partners, L.P. (ARLP -0.05%) climbed 8.8% on Monday after the natural resources company reported sharply higher profits and boosted its cash payout to investors.
So what
Alliance's revenue surged 48% year over year to $700.7 million in the fourth quarter. The energy provider's net income, in turn, soared 314% to $214.5 million, or $1.63 per unit.
Following Russia's invasion of Ukraine, many governments and businesses have been striving to secure energy supplies from more reliable sources. That's leading to significantly higher prices for coal and other fuels from U.S.-based producers.
Higher coal demand is also enabling Alliance to secure long-term supply contracts. The company said it already has commitments for roughly 94% of its projected coal sales volumes in 2023 at favorable prices.
"Europe's shift from Russian energy and U.S. and its allies' economic sanctions are lowering Russian supply to the world, changing global energy trade routes and energy markets for several years to come, if not permanently," CEO Joseph Craft said in a press release. "U.S. natural gas and coal exports should benefit in 2023 and beyond."
Now what
These positive trends prompted Alliance to raise its quarterly cash distribution by 40% to $0.70 per unit ($2.80 annualized). The master limited partnership's units will now yield more than 12%. Alliance also increased its buyback program by $100 million.
"With our strong balance sheet and relentless focus on cash flow generation, we are well positioned to capitalize on growth opportunities in the market and return capital to our unitholders," Craft said.
