Hallador Energy Q2 Earnings Call Highlights

Hallador Energy NASDAQ: HNRG reported a second-quarter net loss as a planned maintenance outage and limited unplanned downtime at its Merom power plant affected profitability, while management highlighted progress on its proposed Turtle Creek natural gas generation project and its expanding long-term contracted sales position. Net loss for the second quarter of 2026 was $15.2 million, compared with net income of $8.2 million in the prior-year period. Total operating revenue declined to $101.5 million from $102.8 million a year earlier, while adjusted EBITDA was negative $2.9 million, compared with positive $3.4 million in the prior-year quarter. Chairman and CEO Brent Bilsland said the second quarter was affected by a roughly 60-day scheduled spring maintenance outage for one of Merom’s two generating units. The company completed major reliability upgrades on Unit 1 intended to address unplanned downtime experienced in recent quarters. Unit 2 performed well during the quarter, Bilsland said, although limited unplanned downtime occurred during periods of elevated market prices. That required Hallador to purchase power at higher prices to meet delivery obligations, magnifying the financial impact. “Together, these factors weighed on our second quarter results,” Bilsland said, adding that management does not believe the quarter reflected Merom’s underlying earnings power. The company expects generation volumes to improve sequentially in the third quarter as the planned outage has concluded and reliability investments take effect. CFO Todd Telesz said second-quarter electric sales were $59.5 million, compared with $60 million a year earlier. Accredited capacity revenue increased 17% year over year to $18.6 million, while total energy sales volume rose 17%. However, the average price per megawatt-hour for delivered energy fell to $41.69 from $52.66 in the previous year’s quarter. Third-party coal sales rose to $40.6 million from $38.1 million. A 9% increase in the average third-party coal price per ton more than offset a 2% decline in third-party tons sold, Telesz said. Sunrise also sold 59,000 additional tons to Merom as the plant prepared for summer demand. Cash flow used in operations was $23.9 million, compared with $11.4 million of operating cash flow generated in the year-earlier quarter. Telesz attributed the change primarily to the outage-related decline in profitability, higher purchased-power costs, and working-capital investment in inventory, parts and supplies. Capital expenditures reached $26.3 million in the quarter, up from $13.1 million a year ago, largely reflecting Merom reliability upgrades and Turtle Creek development.