CONSOL Energy (CEIX) - 2025 Q2 - Quarterly Results

Core Natural Resources Q2 2025 Earnings Release Core Natural Resources reports Q2 2025 results, covering financial, operational, synergy, and outlook Financial & Operational Highlights Core Natural Resources reported Q2 2025 net loss, strong free cash flow, and increased merger synergy targets Q2 2025 Key Financial Metrics | Metric | Value (million $) | | :--- | :--- | | Revenues | $1,102.4 | | Net Loss | $(36.6) | | Diluted EPS | $(0.70) | | Adjusted EBITDA | $144.3 | | Net Cash from Operating Activities | $220.2 | | Free Cash Flow | $131.1 | - Returned $87.1 million to stockholders during the quarter through a combination of share buybacks and quarterly dividends[1][2] - The company increased its target for merger-related annual synergies to a new range of $150 million to $170 million[1][6] - Strengthened the balance sheet by increasing cash and cash equivalents by $25 million and overall liquidity by $90 million[1] Operational Performance by Segment High C.V. Thermal volumes rose, Metallurgical impacted by Leer South, Powder River Basin strong High C.V. Thermal Coal Segment High C.V. Thermal volumes up 18%, with $60.50/ton revenue and $39.47/ton cash cost Q2 2025 High C.V. Thermal Segment Performance | Metric | Value | Note | | :--- | :--- | :--- | | Sales Volume Change (%) | +18% | vs. Q1 2025 | | Realized Coal Revenue per Ton ($) | $60.50 | Modestly lower than Q1 | | Cash Cost of Coal Sold per Ton ($) | $39.47 | N/A | Metallurgical Segment Metallurgical segment sales were 1.9 million tons, impacted by a $21.2 million Leer South outage cost Q2 2025 Metallurgical Segment Performance | Metric | Value | | :--- | :--- | | Coking Coal Sales (million tons) | 1.9 | | Thermal Byproduct Sales (million tons) | 0.3 | | Realized Revenue per Ton (Coking) ($) | $114.71 | | Realized Revenue per Ton (Total Met) ($) | $104.22 | | Cash Cost of Coal Sold per Ton ($) | $95.93 | | Leer South Idle Costs (million $) | $21.2 | Powder River Basin Segment Powder River Basin achieved 12.6 million tons in sales with strong cash margins Q2 2025 Powder River Basin Segment Performance | Metric | Value | | :--- | :--- | | Sales Volumes (million tons) | 12.6 | | Realized Coal Revenue per Ton ($) | $14.69 | | Cash Cost of Coal Sold per Ton ($) | $13.40 | Merger Synergy & Capital Structure Core raised synergy targets, generated $131.1 million FCF, and optimized capital structure Synergy Update Core increased annual synergy target to $150-$170 million for value, cost, and margin gains - The targeted range for annual synergy generation has been increased to between $150 million and $170 million per year[6] - Synergy efforts are expected to lead to increased product value, reduced operating costs, expanded operating margins, and a leaner corporate structure[7] Financial, Liquidity, and Capital Return Core generated $131.1 million FCF, returned $81.9 million, and maintained $948 million liquidity - The company's capital return framework targets returning around 75% of free cash flow to stockholders, primarily through share repurchases[7] Q2 2025 Capital Allocation | Item | Value | | :--- | :--- | | Free Cash Flow Generated (million $) | $131.1 | | Shares Repurchased (million) | 1.2 | | Value of Repurchases (million $) | $81.9 | | Quarterly Dividend Declared ($ per share) | $0.10 | - As of June 30, 2025, total liquidity was $948 million, including $413 million in cash and cash equivalents[10] - Completed the construction of its desired post-merger capital structure through consolidation of A/R facilities, a revolving credit facility upsizing, and a tax-exempt bond refinancing[11] Key Operational Updates This section details the operational status and recovery plan for the Leer South mine Leer South Mine Update Leer South mine resealed, recovery by October, $20-30M Q3 costs, >$100M insurance recoveries - The mine was re-entered on June 10, 2025, but had to be evacuated and resealed on June 26, 2025, due to an increase in carbon monoxide levels[12][13] - The company's objective is to recover and reposition the longwall equipment by the end of October and resume longwall production shortly thereafter[13] Leer South Financial Impact | Item | Expected Value (million $) | | :--- | :--- | | Q3 2025 Fire Extinguishment & Idle Costs | $20 - $30 | | Total Insurance Recoveries | > $100 | Market & Policy Environment Core secured 2025 coal volume commitments and noted favorable pro-coal policy developments Marketing Update Core nearly fully committed for 2025 sales, High C.V. Thermal 30.0M tons, PRB $14.40/ton - High C.V. Thermal: 30.0 million tons committed for 2025 delivery at a projected realized revenue of $60 to $62 per ton[16] - Metallurgical: Commitments in place for virtually all projected 2025 coking coal sales volumes, with the majority tied to market-based pricing[17] - Powder River Basin: Fully committed for 2025 at a projected realized revenue of $14.40 per ton[17] Policy Developments Favorable Trump policies include executive orders and OBBBA for tax credits and lower royalty rates - In April 2025, President Trump issued executive orders to reduce the regulatory burden on U.S. coal-based power plants[18] - The 'One Big Beautiful Bill Act' (OBBBA) was signed into law, designating U.S.-produced metallurgical coal as a 'critical material' under Section 45X, making the company eligible for a 2.5% monetizable tax credit on production costs for four years starting in 2026[20] - OBBBA also lowers the royalty rate on tons produced on federal lands, which will benefit Core's Powder River Basin and West Elk mines[20] Company Outlook & Guidance Management confident in stockholder value, providing detailed 2025 guidance for sales, costs, and capex Management Outlook Management leverages strengths and capital return programs for stockholder value and market recovery - Management believes the company is uniquely equipped to create stockholder value in a wide range of market environments due to its world-class mines, strategic logistics, strong balance sheet, and cash-generating capabilities[23] 2025 Full-Year Guidance Full-year 2025 guidance projects 81.5-87.0M tons sales, with detailed segment costs and capex 2025 Full-Year Guidance | Category | Metric | Guidance | | :--- | :--- | :--- | | Sales Volume | | | | | Coking (million tons) | 7.5 - 8.0 | | | High C.V. Thermal (million tons) | 29.0 - 31.0 | | | Powder River Basin (million tons) | 45.0 - 48.0 | | Cash Cost of Coal Sold per Ton | | | | | Metallurgical ($/ton) | $95.00 - $99.00 | | | High C.V. Thermal ($/ton) | $38.00 - $40.00 | | | Powder River Basin ($/ton) | $12.75 - $13.25 | | Corporate | | | | | Capital Expenditures (million $) | $300 - $330 | | | DD&A (million $) | $560 - $590 | Financial Statements & Reconciliations This section presents Q2 2025 cash flow statements and non-GAAP reconciliations Condensed Consolidated Statements of Cash Flows Q2 2025 net loss $36.6M, $220.2M operating cash, $27.6M cash increase Q2 2025 Condensed Statement of Cash Flows (in thousands) | Item | Three Months Ended June 30, 2025 (thousands $) | | :--- | :--- | | Net Cash Provided by Operating Activities | $220,161 | | Net Cash Used in Investing Activities | $(100,222) | | Net Cash Used in Financing Activities | $(92,364) | | Net Increase in Cash and Cash Equivalents | $27,575 | Reconciliation of Non-GAAP Financial Measures This section reconciles GAAP revenues/costs to non-GAAP metrics like Adjusted EBITDA and FCF - Reconciles GAAP revenues of $1,102.4 million to Non-GAAP Segment Realized Coal Revenue of $924.7 million for Q2 2025[31] - Reconciles GAAP Cost of Sales of $912.6 million to Non-GAAP Segment Cash Cost of Coal Sold of $713.7 million for Q2 2025[34] - Reconciles GAAP Net Loss of $(36.6) million to Adjusted EBITDA of $144.3 million for Q2 2025[36] - Reconciles Net Cash Provided by Operating Activities of $220.2 million to Free Cash Flow of $131.1 million for Q2 2025[38]