Warrior Met Coal(HCC)
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Warrior Met Coal(HCC) - 2024 Q4 - Earnings Call Transcript
2025-02-13 22:32
Financial Data and Key Metrics Changes - The company reported a net income of $1.1 million or $0.02 per diluted share for Q4 2024, a significant decrease from $129 million or $2.47 per diluted share in Q4 2023 [24] - Adjusted EBITDA for Q4 2024 was $53 million, down from $164 million in the same quarter last year, with an adjusted EBITDA margin of 18% compared to 45% in Q4 2023 [25][27] - Total revenues decreased to $297 million in Q4 2024 from $364 million in Q4 2023, primarily due to a 34% drop in average net selling prices [27] Business Line Data and Key Metrics Changes - Sales volume in Q4 2024 was 1.9 million short tons, up from 1.5 million short tons in Q4 2023, driven by better production volumes [12][14] - Production volume increased to 2.1 million short tons in Q4 2024 from 2 million short tons in the same quarter of 2023, with Mine 4 achieving record production of 2.8 million short tons for the year [14][24] - The company achieved a gross price realization of 86% for Q4 2024 and 89% for the full year, influenced by product mix and geography [10] Market Data and Key Metrics Changes - The PLV FOB Australia index ended Q4 2024 at $178 per short ton, down $7 from Q3, while the PLBCFR China index ended at $180 per short ton [10] - Global pig iron production decreased by 1.8% in 2024, with China's production falling by 2.3% [11] - Sales into Asia increased from 25% of the geographic mix in Q4 2023 to 38% in Q4 2024, while sales into Europe decreased from 56% to 36% [13] Company Strategy and Development Direction - The company is focused on the Blue Creek growth project, with total project investment reaching $717 million, funded entirely from internally generated cash flows [18][20] - The company anticipates incremental annualized production of at least 4.8 million short tons after the startup of the longwall, enhancing its cost curve positioning [21] - The company plans to maintain tight capital spending discipline while preparing for the longwall production expected to start by Q2 2026 [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted that weak market conditions are expected to persist, impacting steelmaking coal prices due to excess supply and low demand [9][31] - The company remains confident in its operational performance outlook for 2025, expecting higher sales and production volumes despite market challenges [31] - Management emphasized the importance of maintaining liquidity to complete the Blue Creek project and prepare for future market improvements [20][35] Other Important Information - The company generated cash from operations of over $367 million in 2024, returning over $43 million to stockholders via dividends [7] - Free cash flow for Q4 2024 was negative $88 million, primarily due to capital expenditures related to Blue Creek [30] - The company ended 2024 with total available liquidity of $655 million [30] Q&A Session Summary Question: Contribution from Blue Creek versus Mine 4 and Mine 7 - The company projects about 1 million tons from Blue Creek and over 2 million tons from Mine 4 for the year [40] Question: Cash cost guidance reductions - The lower cash cost guidance is primarily attributed to lower met coal prices affecting transportation and royalties [41][42] Question: Sales by geography and potential shifts - Tons that would have gone to China are expected to flow into other Asian markets without significant transportation cost differentials [43] Question: Shipment timing for Blue Creek - The majority of Blue Creek's shipments are expected in the second half of the year [48] Question: Price realizations for high vol A coal - The company maintains a price realization expectation of 85% to 90% for now, with potential changes as volumes increase [49] Question: Inventory targets for year-end 2025 - The company aims to normalize inventory levels to a couple of hundred thousand tons per mine by year-end 2025 [55] Question: New labor contract negotiations - Ongoing negotiations with the United Mine Workers are still in progress, with uncertain outcomes [64] Question: Future cash balance considerations - The company plans to maintain a higher minimum cash balance as it scales up operations with Blue Creek [66]
Warrior Met Coal(HCC) - 2024 Q4 - Annual Report
2025-02-13 21:44
Commodity Price Risk - The company has exposure to commodity price risk on coal sales, with pricing terms typically set for three months and volume terms ranging from one to three years [517]. - The company is subject to fluctuations in market pricing due to the short-term nature of sales commitments in the steelmaking coal market [517]. Natural Gas Hedging - As of December 31, 2024, the company had 5.5 million British thermal unit gas contracts outstanding to hedge against natural gas price fluctuations [518]. Credit Losses - The company has no allowances for credit losses associated with trade accounts receivables for the years ended December 31, 2024 and 2023 [520]. Interest Rates and Debt - The company's Notes have a fixed interest rate of 7.875% per annum, payable semi-annually [521]. - The ABL Facility bears an interest rate equal to SOFR plus a credit adjustment spread, currently ranging from 11 bps to 43 bps [522]. - A 100 basis point increase in interest rates would increase the annual interest expense under the ABL Facility by approximately $1.1 million, assuming $113.5 million is outstanding [522]. - The company has substantial indebtedness and debt service requirements, which could impact financial flexibility [15]. Geopolitical and Market Conditions - The company is monitoring geopolitical events, including the Russia-Ukraine war, which may affect operations and market conditions [15]. Inflationary Pressures - The company is experiencing inflationary pressures on supplies used in production, including belt structure, roof bolts, cable, magnetite, and rock dust [523]. - Rising costs due to inflation are impacting labor and parts for repair and rebuild equipment [523]. - The company is implementing strategies to mitigate inflation's impact, such as placing purchase orders earlier [523]. - Utilizing short-term contracts is part of the company's strategy to manage inflation [523]. - The company is leveraging supplier relationships to counteract rising costs [523].
Warrior Met Coal(HCC) - 2024 Q4 - Annual Results
2025-02-13 21:04
Exhibit 99.1 Warrior Met Coal Reports Fourth Quarter and Full Year 2024 Results Met or exceeded all guidance targets for the full year Continued to make excellent progress in developing its world-class Blue Creek growth project Outlines favorable guidance for 2025 BROOKWOOD, AL -- February 13, 2025 - Warrior Met Coal, Inc. (NYSE:HCC) ("Warrior" or the "Company") today announced results for the fourth quarter and full-year 2024. Warrior is the leading dedicated U.S.-based producer and exporter of high-qualit ...
Warrior Met Coal: Characterized By Low Operating Expenses And Solid Capital Deployment
Seeking Alpha· 2025-01-09 16:52
Warrior Met Coal (NYSE: HCC ) is a company specializing in the production as well as the export of coal, more specifically non-thermal metallurgical coal used in steel production. Customers can be found worldwide, with key growth marketsMy name is Maxime and I like to write about finances and share my views on various companies and their potential as an investment opportunity. My preferred sector is industrial. I live and work in Europe and we have a very long and proud history of being an industrial superp ...
Tokio Marine HCC Ratings of A++ and AA- Affirmed by AM Best and Fitch with Stable Outlook
GlobeNewswire News Room· 2024-11-12 15:00
HOUSTON, Nov. 12, 2024 (GLOBE NEWSWIRE) -- Tokio Marine HCC today announced that AM Best and Fitch Ratings have affirmed the Company’s ratings. “We are incredibly pleased that AM Best and Fitch have affirmed Tokio Marine HCC’s financial strength ratings of ‘A++’ and ‘AA-,’ respectively. These outstanding ratings reflect our sound and effective risk culture, balance sheet strength and exceptional long-term performance across underwriting cycles,” said Susan Rivera, Tokio Marine HCC’s Chief Executive Officer. ...
Warrior Met Coal (HCC) Surpasses Q3 Earnings and Revenue Estimates
ZACKS· 2024-10-30 23:01
Warrior Met Coal (HCC) came out with quarterly earnings of $0.80 per share, beating the Zacks Consensus Estimate of $0.40 per share. This compares to earnings of $1.85 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 100%. A quarter ago, it was expected that this company would post earnings of $1.32 per share when it actually produced earnings of $1.35, delivering a surprise of 2.27%. Over the last four quarters, the company h ...
Tokio Marine HCC Appoints David Perez to Launch US Excess Casualty Business
GlobeNewswire News Room· 2024-10-15 14:00
HOUSTON, Oct. 15, 2024 (GLOBE NEWSWIRE) -- Tokio Marine HCC (TMHCC), based in Houston, Texas, has today announced the expansion of its specialty product offering with its entry into the Excess Casualty market. David Perez has been appointed as President, Excess Casualty, to lead the launch and build out the new offering. David takes up his new role with immediate effect and will report to Susan Rivera, Chief Executive Officer (CEO) of TMHCC. TMHCC's entry into this space is timely and will provide insureds ...
Warrior Met Coal: A Low-Cost Producer But A Hold For Now
Seeking Alpha· 2024-10-10 12:11
Warrior Met Coal (NYSE: HCC ) is the low-cost producer of metallurgical coal in the United States. While it does not have as big of a production footprint as AMR or the potential merger child of Individual Investor with ventures in pubic and private markets. I look for wonderful companies in the market that I have a capability of understanding, have strong intrinsic characteristics that separates and protects it from the competition and, that hopefully has a management team that acts with integrity (and som ...
Warrior Met Coal: Blue Creek Should Substantially Boost Earnings And Cash Flows
Seeking Alpha· 2024-08-28 15:55
Monty Rakusen Overview Warrior Met Coal (NYSE:HCC) is a metallurgical coal producer with its assets in Alabuma, USA. The company is exclusively focused on the export market due to the location, which provides Warrior with relatively low-cost transportation to the McDuffie Coal Terminal in Mobile. I I last covered Warrior Met Coal in January of this year and this is a follow-up article with a focus on the Q2 2024 results released at the beginning of August and progress at Blue Creek, The company has two oper ...
Warrior Met Coal (HCC) Q2 Earnings and Revenues Surpass Estimates
ZACKS· 2024-08-01 23:05
Warrior Met Coal (HCC) came out with quarterly earnings of $1.35 per share, beating the Zacks Consensus Estimate of $1.32 per share. This compares to earnings of $1.63 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 2.27%. A quarter ago, it was expected that this company would post earnings of $2.02 per share when it actually produced earnings of $2.63, delivering a surprise of 30.20%. Over the last four quarters, the company ...