SunCoke Energy(US:SXC)2025-04-30 15:00Financial Data and Key Metrics Changes - SunCoke Energy reported consolidated adjusted EBITDA of $59.8 million for Q1 2025, down from $67.9 million in the prior year period, primarily due to lower economics on the Granite City contract extension and lower spot blast coke sales volumes [9][11][12] - Net income attributable to SunCoke was $0.20 per share in Q1 2025, a decrease of $0.03 compared to the prior year [11] - The company ended the quarter with a strong liquidity position of $543.7 million, including a cash balance of $193.7 million and a fully undrawn revolver of $350 million [10][15] Business Line Data and Key Metrics Changes - Domestic coke adjusted EBITDA was $49.9 million with sales volumes of 898,000 tons, impacted by lower economics and volumes at Granite City due to the contract extension [12] - The logistics business generated adjusted EBITDA of $13.7 million, an increase from $13 million in the prior year, driven by higher transloading volumes [13][14] Market Data and Key Metrics Changes - The spot glass coke pricing environment remains highly challenged, but demand for coke is present, with all spot blast and foundry coke sales finalized for the full year [9] - The company reaffirmed its full-year consolidated adjusted EBITDA guidance range of $210 million to $225 million [11][18] Company Strategy and Development Direction - The company is focused on maintaining strong safety and environmental performance while executing its operating and capital plans [16] - SunCoke is pursuing growth opportunities beyond the GPI project, emphasizing disciplined capital allocation to reward long-term shareholders [17][24] - The Granite City coke supply agreement with U.S. Steel has been extended through September 30, 2025, with an option for further extension [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain and volatile outlook for the steel industry but stated that coke production and sales plans remain on track [12] - The company expects to see improved margins in the second half of the year as contracts are adjusted and spot exposure increases [21][22] - Management remains cautious regarding capital expenditures, indicating a likelihood of not spending the previously planned $65 million due to current uncertainties [31][32] Other Important Information - A dividend of $0.12 per share is payable to shareholders on June 2, 2025 [9] - The company spent $4.9 million on capital expenditures in Q1 2025 [15] Q&A Session Summary Question: Annual guidance implies an uplift in quarterly adjusted EBITDA; can you discuss the cadence? - Management indicated that lower EBITDA in Q1 was expected due to contract timing, with expectations for improved performance in the second half of the year [20][21][22] Question: What are the capital allocation priorities beyond the GPI project? - Management emphasized a disciplined approach to identifying profitable growth opportunities while maintaining dividends to reward shareholders [24][25] Question: What drove the inventory build on the coal side? - The inventory build was attributed to seasonal factors and the new coal blend at the beginning of the year, with expectations for reversal later in the year [27][28] Question: Can you provide insights on the health of the foundry and export coke markets? - Management noted that while the market is challenging, they are closely monitoring conditions and have made strategic decisions to sell early in the year [36][37] Question: What drove the higher EBITDA per ton in the Domestic Coke segment? - The higher EBITDA per ton was influenced by the absence of lower-margin blast coke sales in Q1, with expectations to revert to guidance levels later in the year [40] Question: Was the lower production from Haverhill planned? - Yes, the lower production was planned and accounted for in the full-year guidance due to challenges in the spot coke market [41]