Hallador Swings to Loss as Power Costs Climb
Second-quarter revenue slipped 1.3% to $101.5 million as third-party coal sales gained.
Hallador Energy (HNRG), the Indiana power producer and coal supplier, swung to a $15.2 million second-quarter net loss from income of $8.2 million a year earlier as plant downtime drove up replacement-power costs.
The loss widened from $9.3 million in the first quarter, marking a sharper reversal as adjusted EBITDA turned negative at $2.9 million from positive $5.5 million sequentially and $3.4 million a year earlier.
Revenue eased from $102.8 million a year earlier and $101.8 million in the first quarter. Electric sales declined to $59.5 million and other revenue fell to $1.4 million, while third-party coal sales increased to $40.6 million.
Purchased-power costs nearly quadrupled to $8.6 million, and other operating and maintenance costs rose 35% to $39.1 million. The increases were due to a planned roughly 60-day outage for Unit 1 reliability work and replacement-power purchases during limited Unit 2 downtime in high-price periods.
Those costs pushed Hallador to a $12.7 million operating loss from $11.8 million of operating income a year earlier, taking its operating margin to about negative 12.5% from positive 11.5%. Operating cash flow swung to a $23.9 million outflow, while capital expenditures doubled to $26.3 million as the company spent on Merom reliability and the Turtle Creek gas-generation project.
Hallador expects generation volumes to improve sequentially in the third quarter following completion of the Unit 1 upgrades. The company reduced Turtle Creek's planned capacity to 460 megawatts and now targets commercial operation in the second half of 2028, with total project costs expected to remain below $800 million.
The company's segment-level contracted revenue reached about $2.4 billion through 2040 at June 30, up from more than $2.1 billion in early June and about $1.3 billion at the end of 2025. That expanding sales book provided longer-term coverage as near-term spending and outages lifted bank debt to $45.0 million and reduced liquidity to $84.2 million.