SunCoke Energy(US:SXC)2021-04-28 18:13Financial Data and Key Metrics Changes - SunCoke Energy reported adjusted EBITDA of $70.6 million for Q1 2021, a 14% increase compared to Q1 2020, driven by improved operational performance across both Coke and Logistics segments [7][9][10] - Net income attributable to SunCoke was $0.20 per share, up $0.14 from the prior-year period, primarily due to the performance of the Logistics segment [9] - The company reduced debt by $33 million during the quarter and maintained a quarterly dividend of $0.06 per share [8][14] Business Line Data and Key Metrics Changes - The Domestic Coke segment achieved an adjusted EBITDA per ton of $61 on 1.038 million sales tons, with operations returning to full capacity [11] - The Logistics segment generated $10.9 million of adjusted EBITDA, significantly up from $3.3 million in the prior year, due to increased throughput volumes [12] - CMT handled 5.3 million tons of throughput volumes, an increase from 4.2 million tons in the prior-year period, driven by higher coal exports and iron ore [12] Market Data and Key Metrics Changes - Strong global demand and favorable API2 pricing contributed to increased coal export volumes, with expectations for continued strength in the second quarter [12][18] - The company expects to handle approximately 5 million tons of coal at CMT, exceeding the original guidance of 4 million to 5 million tons [12] Company Strategy and Development Direction - The company is focused on optimizing production and expanding market participation in foundry and export coal markets [7] - A new take-or-pay agreement for iron ore pellets at CMT is seen as a significant step towards revitalizing the Logistics segment [17] - The company aims to achieve a long-term gross leverage target of 3x or lower by the end of the year [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving results at the top end of the 2021 guidance of $215 million to $230 million, supported by strong performance in the steel and coal export markets [18] - The company emphasized the importance of maintaining exceptional safety performance while executing operational and capital plans [16] Other Important Information - The company ended Q1 with a cash balance of approximately $54 million and a total liquidity position of approximately $386 million [13][14] - Cash flow from operating activities was close to $65 million, reflecting strong operational performance [13] Q&A Session Summary Question: What was the foundry coke volumes in the first quarter? - Management refrained from discussing specific volumes or price components of foundry coke, noting that the foundry initiative has exceeded expectations [21] Question: Is the iron ore take-or-pay contract with a U.S. or foreign customer? - The contract is with a U.S. customer [26] Question: Can you provide more context around cash flow guidance for the year? - Management indicated that the plan is to use generated cash flow to reduce the revolver balance over the next three quarters [28] Question: What is driving the better-than-expected performance? - The outperformance is attributed to meeting expectations across domestic, export, and foundry markets, with significant contributions from cost management [32] Question: What is the plan for 2022 regarding Domestic Coke minimums? - Management is in discussions with domestic customers and exploring growth in export and foundry coke business, with updates expected as 2022 approaches [34] Question: Can you elaborate on the environmental advantages of your coking coal? - The company highlighted its environmentally friendly production process and the ability of its products to reduce greenhouse gas emissions in steel production [45]