SunCoke Energy (SXC) Q4 2025 Earnings Transcript

Core Insights - The company made significant progress in capital allocation priorities in 2025, highlighted by the acquisition of Phoenix and a return of approximately $41 million to shareholders through dividends [1][11] - The integration of Phoenix is progressing well, and the company expects continued growth and a quarterly dividend throughout 2026 [1][12] Financial Performance - The consolidated adjusted EBITDA for 2025 was $219.2 million, reflecting a decrease of $53.6 million compared to the previous year, primarily due to lower coke sales volumes and market conditions [3][7] - The fourth quarter net loss attributable to the company was $1 per share, down from $1.28 in 2024, influenced by one-time items including asset impairment charges and restructuring costs related to the Phoenix acquisition [5][6] - The domestic coke segment faced challenges due to a change in the mix of contract and spot coke sales, resulting in lower economics on the Granite City contract extension and a breach of contract by Algoma [2][8] Operational Highlights - The company achieved a total recordable incident rate of 0.55, emphasizing its commitment to safety [3] - The domestic coke business delivered an adjusted EBITDA of $170 million, down $64.7 million from the prior year, impacted by contract changes and lower sales volumes [8] - The Industrial Services segment, including the new Phoenix Global business, reported an adjusted EBITDA of $62.3 million, an increase of $11.9 million year-over-year, driven by the addition of Phoenix Global [9] Future Outlook - For 2026, the company expects consolidated adjusted EBITDA to be between $230 million and $250 million, with domestic coke adjusted EBITDA projected to be lower by $2 million to $8 million [15][20] - The Industrial Services segment is anticipated to see an increase in adjusted EBITDA by $28 million to $38 million, benefiting from a full year of Phoenix Global and improved market conditions [15][20] - The company plans to utilize excess free cash flow to pay down outstanding borrowings and maintain a gross leverage target below three times [14][21]