CONSOL Energy (CEIX) - 2025 Q1 - Quarterly Results

Core Natural Resources Q1 2025 Earnings Report Financial & Operational Highlights The company reported a net loss of $69.3 million due to merger costs but generated $123.5 million in adjusted EBITDA and advanced key strategic initiatives Q1 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Net Loss | $69.3 million | | Diluted EPS | ($1.38) | | Adjusted EBITDA | $123.5 million | | Revenues | $1,017.4 million | | Merger-Related Expenses | $49.2 million | - Returned $106.6 million to investors through $101.3 million in share buybacks and a $0.10 per share quarterly dividend[1][2] - Increased the target for merger-related synergies by 10% at the midpoint to a new range of $125 to $150 million annually[1][5] - Made excellent progress towards the full resumption of operations at the Leer South mine, which is on track for mid-year[1][3][4] Management Commentary Management highlighted strong merger integration progress, synergy realization, and successful capital market transactions that bolstered financial flexibility - CEO Paul Lang stated that the company has made "exceptional progress" in integrating the merged portfolio and has already executed strategies to deliver on increased synergy targets[2] - The high c.v. thermal segment generated substantial free cash flow by leveraging its contracted business and strong U.S. power markets, mitigating the impact of the Leer South longwall outage[2] - CFO Mitesh Thakkar noted that recent capital market transactions have bolstered liquidity, extended maturities, and added significant financial flexibility to execute the capital return program[13] Operational Performance & Updates The company is on track to resume Leer South operations, has increased its merger synergy target, and saw strong thermal segment performance Leer South Mine Update The company is on track to resume longwall production at Leer South by mid-year 2025 following a successful mitigation of a combustion event - The company temporarily sealed the active longwall panel to extinguish isolated combustion-related activity[3] - Core remains on track to resume longwall production by mid-year, in line with the originally indicated timeline[4] - Development work resumed in February and is progressing at a strong pace, which is expected to translate into higher future longwall productivity[4] Merger Synergy Update The annual merger synergy target was increased by 10% to a new range of $125 to $150 million, with further uplift expected - The targeted range for synergy creation has been increased by 10% at the midpoint to $125 to $150 million per year[5] - Additional synergy uplift is expected as coal markets normalize, which will increase value in areas like marketing and product blending[6] Segment Performance Strong thermal segment results helped offset metallurgical segment challenges caused by the Leer South outage, with improvement expected in H2 Q1 2025 High C.V. Thermal Segment Performance | Metric | Value | | :--- | :--- | | Sales Volumes | 7.1 million tons | | Realized Coal Revenue per Ton | $63.18 | | Cash Cost of Coal Sold per Ton | $42.78 | Q1 2025 Metallurgical Segment Performance | Metric | Value | | :--- | :--- | | Total Sales Volumes | 2.3 million tons | | Coking Coal Sales | 1.9 million tons | | Realized Coking Coal Revenue per Ton | $113.70 | | Segment Cash Cost of Coal Sold per Ton | $91.00 | - With the Leer South longwall expected to resume mid-year, the metallurgical segment's cash cost of coal sold per ton is guided to be in the low $90 range during the second half of 2025[9] Financial Position & Capital Allocation The company maintained strong liquidity, executed $101.3 million in share buybacks, and refinanced debt to enhance financial flexibility - As of March 31, 2025, total liquidity was $858.3 million, including $388.5 million in cash and cash equivalents[10] Q1 2025 Capital Return | Metric | Value | | :--- | :--- | | Share Repurchases | $101.3 million | | Shares Repurchased | 1.4 million | | Average Repurchase Price | $73.52 per share | | Quarterly Dividend | $0.10 per share | - The company has $898.7 million remaining under its existing $1.0 billion share repurchase authorization[14] - Successfully refinanced debt by upsizing its revolving credit facility to $600 million and refinancing $306.8 million in tax-exempt bonds, reducing the weighted average interest rate to 5.3%[15] Market Dynamics & Outlook The company affirmed its 2025 guidance, navigating soft markets with a strong contracted position and a positive long-term metallurgical outlook - The high c.v. thermal segment has a committed and priced position of approximately 26 million tons at a projected price between $61 and $63 per ton for the year, counterbalancing export market softness[18] - Long-term metallurgical market dynamics are highly promising due to new blast furnace capacity in Southeast Asia and rising Indian imports, with Chinese imports also absorbing supply[19] - The company affirmed or enhanced its full-year guidance in all instances and expects to continue generating substantial free cash flow to return to stockholders[20] 2025 Full-Year Guidance The company projects 2025 sales of 75.5-81.0 million tons and capital expenditures of $300-$330 million, with detailed segment guidance 2025 Full-Year Guidance Highlights | Metric | Coking (Met) | High C.V. Thermal | Powder River Basin | Corporate | | :--- | :--- | :--- | :--- | :--- | | Sales Volume (M tons) | 7.5 - 8.0 | 29.0 - 31.0 | 39.0 - 42.0 | N/A | | Cash Cost/Ton | $94.00 - $98.00 | $38.00 - $40.00 | $13.75 - $14.25 | N/A | | Committed & Priced | 2.9M tons @ $122.38 | 26.0M tons @ $61-$63 | 41.9M tons @ $14.77 | N/A | | Capital Expenditures | | | | $300M - $330M | - Metallurgical cash cost per ton is projected to improve to the low $90s/ton in the second half of 2025, following the restart of the Leer South longwall[23] Reconciliation of Non-GAAP Financial Measures This section provides detailed reconciliations from GAAP figures to non-GAAP metrics like Adjusted EBITDA and Free Cash Flow for Q1 2025 Reconciliation of Realized Coal Revenue GAAP revenues of $1,017.4 million are reconciled to Non-GAAP Segment Realized Coal Revenue of $835.8 million for Q1 2025 Q1 2025 Revenue Reconciliation (in thousands) | Item | Amount | | :--- | :--- | | GAAP Revenues | $1,017,406 | | Less: Transportation Expense | ($173,451) | | Less: Net Terminal & Other Revenues | ($8,151) | | Non-GAAP Segment Realized Coal Revenue | $835,804 | Q1 2025 Metallurgical Realized Revenue per Ton | Coal Type | Realized Revenue per Ton | | :--- | :--- | | Coking Coal | $113.70 | | Thermal Byproduct | $32.83 | | Total Metallurgical Segment | $98.26 | Reconciliation of Cash Cost of Coal Sold GAAP Cost of Sales of $870.3 million is reconciled to Non-GAAP Segment Cash Cost of Coal Sold of $647.5 million for Q1 2025 Q1 2025 Cost of Sales Reconciliation (in thousands) | Item | Amount | | :--- | :--- | | GAAP Cost of Sales | $870,296 | | Less: Transportation Costs | ($157,181) | | Less: Cost of Sales from Idled Operations | ($41,050) | | Less: Other Costs | ($24,571) | | Non-GAAP Segment Cash Cost of Coal Sold | $647,494 | Reconciliation of Adjusted EBITDA A GAAP Net Loss of $69.3 million is reconciled to an Adjusted EBITDA of $123.5 million for Q1 2025 Q1 2025 Adjusted EBITDA Reconciliation (in thousands) | Item | Amount | | :--- | :--- | | Net Loss | ($69,277) | | Add: Depreciation, Depletion & Amortization | $121,556 | | Add: Merger-Related Expenses | $49,182 | | Add: Stock-Based Compensation | $12,859 | | Add: Loss on Debt Extinguishment | $11,680 | | Add: Interest & Tax | ($2,515) | | Adjusted EBITDA | $123,485 | Reconciliation of Free Cash Flow Net Cash Used in Operating Activities of ($109.6 million) is reconciled to Free Cash Flow of $49.1 million for Q1 2025 Q1 2025 Free Cash Flow Reconciliation (in thousands) | Item | Amount | | :--- | :--- | | Net Cash Used in Operating Activities | ($109,638) | | Less: Capital Expenditures | ($64,822) | | Add: Proceeds from Sales of Assets | $6,003 | | Add: Unrestricted Cash Proceeds from Merger | $217,593 | | Free Cash Flow | $49,136 | About the Company & Forward-Looking Statements This section provides company background and outlines the risks and uncertainties associated with forward-looking statements in the report - Core Natural Resources was created in January 2025 via the merger of CONSOL Energy and Arch Resources and operates a portfolio including the Pennsylvania Mining Complex, Leer, Leer South, and West Elk mines[27] - The report includes forward-looking statements that involve numerous risks and uncertainties, and the company does not undertake any obligation to update these statements[38][40]