SunCoke Energy(US:SXC)2025-07-30 16:00Financial Data and Key Metrics Changes - SunCoke Energy reported consolidated adjusted EBITDA of $43.6 million for Q2 2025, a decrease from $63.5 million in the prior year period, primarily due to lower contract coke sales and unfavorable economics from the Granite City contract extension [4][12] - Net income attributable to SunCoke was $0.02 per share, down $0.23 compared to the prior year, impacted by lower contract coke sales and transaction costs related to the acquisition of Phoenix Global [11][12] - The company ended Q2 with a strong liquidity position of $536.2 million, including a cash balance of $186.2 million and a fully undrawn revolver of $350 million [5][14] Business Line Data and Key Metrics Changes - Domestic coke adjusted EBITDA for Q2 was $40.5 million, with coke sales volumes at 943,000 tons, reflecting a decrease due to a change in the mix of contract and spot coke sales [12][13] - The logistics business generated $7.7 million of adjusted EBITDA, with terminals handling combined throughput volumes of 4.8 million tons, also impacted by lower transloading volumes due to market conditions [13][14] Market Data and Key Metrics Changes - The company expects higher contract coke sales in the second half of the year, reaffirming its domestic coke adjusted EBITDA guidance range of $185 million to $192 million [13] - Logistics adjusted EBITDA guidance for the full year remains at $45 million to $50 million, with expectations of improved volumes in the second half [14][18] Company Strategy and Development Direction - The acquisition of Phoenix Global for $325 million is seen as a strategic fit, expected to be immediately accretive and providing opportunities for organic growth through new industrial customers [5][6][10] - The company aims to integrate Phoenix's operations into a new Industrial Services segment, leveraging its strong financial position and operational excellence [10][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improvements in both logistics and domestic coke in the second half of the year, reaffirming full-year consolidated adjusted EBITDA guidance of $210 million to $225 million [18] - The company is focused on maintaining operational discipline and capital allocation to reward long-term shareholders while integrating Phoenix's operations [17][18] Other Important Information - The company amended and extended its revolving credit facility, now maturing in July 2030, with covenants similar to the previous agreement [5][14] - The acquisition is expected to generate annual synergies of approximately $5 million to $10 million [6] Q&A Session Summary Question: Can you walk us through the drivers of the improvement from here? - Management indicated that the second quarter was expected to be the trough of 2025, with higher contract coke sales anticipated in the second half, aiming for a total of 2 million to 2.1 million tons of coke sales [20][21] Question: Can you talk about the macro drivers of Phoenix Global? - Management highlighted excitement about the EAF exposure from Phoenix, which diversifies the customer base and presents opportunities for organic growth [23][25] Question: What are the recent conversations with your largest customer regarding contract renewals? - Management confirmed active discussions with Cliffs regarding contract renewals, noting that they were surprised by comments made during Cliffs' earnings call [27][28] Question: How do you view the logistics business and export coal demand? - Management acknowledged that the majority of volumes at CMT are coal for export, with higher domestic pricing impacting international shipments, but reaffirmed logistics guidance based on expected volumes [39][40] Question: Any updates on the GPI project? - Management stated they are in active discussions with U.S. Steel regarding the GPI project but had no further details to share at this time [47]