SunCoke Energy(US:SXC)2026-02-17 17:02Financial Data and Key Metrics Changes - The consolidated adjusted EBITDA for 2025 was $219.2 million, down $53.6 million from the prior year, primarily due to changes in contract and spot coke sales, lower economics on the Granite City contract extension, and lower handling volumes [5][10] - The fourth quarter net loss attributable to SunCoke was $1 per share, down $1.28 compared to Q4 2024, mainly driven by one-time items totaling $0.85 per share net of tax [8][9] - Full year net loss attributable to SunCoke was $0.52 per share, down $1.64 from 2024, influenced by one-time items including non-cash asset impairment charges [8][9] Business Line Data and Key Metrics Changes - The domestic coke business delivered full-year adjusted EBITDA of $170 million, down $64.7 million from the prior year, impacted by contract and spot coke sales mix and the Algoma breach [10] - The industrial services segment, including Phoenix Global, delivered full-year adjusted EBITDA of $62.3 million, an increase of $11.9 million year-over-year, primarily due to the addition of Phoenix Global [11] - Corporate and other expenses increased by $800,000 year-over-year to $13.1 million, reflecting results from legacy coal mining and Brazil coke-making businesses [11] Market Data and Key Metrics Changes - The domestic coke segment is expected to deliver adjusted EBITDA between $162 million and $168 million in 2026, with sales of approximately 3.4 million tons [16][18] - Industrial services adjusted EBITDA is projected to be between $90 million and $100 million in 2026, reflecting expectations for improved market conditions [19][20] Company Strategy and Development Direction - The company plans to utilize free cash flow to support capital allocation priorities, including paying down revolver balance and maintaining dividends [22][23] - The integration of Phoenix Global is progressing well, with expectations for growth potential in this business [7][23] - The company aims to maintain strong safety and environmental performance, which is central to delivering high-quality coke and industrial services [22] Management's Comments on Operating Environment and Future Outlook - Management anticipates a meaningful recovery in 2026, supported by an optimized coke fleet and extended coke-making contracts [15] - The company expects consolidated adjusted EBITDA to be between $230 million and $250 million in 2026, with a focus on deleveraging and maintaining a gross leverage target below 3x [15][21] - Management highlighted the impact of ongoing litigation with Algoma, expecting to recover losses from the breach of contract [28][30] Other Important Information - The company returned approximately $41 million to shareholders via dividends in 2025 and plans to continue this in 2026 [7] - Capital expenditures for 2025 were $66.8 million, slightly below the revised guidance of $70 million [13] Q&A Session Summary Question: Status of litigation with Algoma - Management confirmed they are pursuing arbitration against Algoma for breach of contract and expect to prevail [28][30] Question: EBITDA contribution from Phoenix Global - Management affirmed the anticipated annual EBITDA contribution from Phoenix Global is still expected to be around $60 million, with synergies of $5 million-$10 million [32] Question: Haverhill One closure and potential reopening - Management stated that Haverhill One could be restarted but would require significant capital investment and about 12-18 months [42] Question: Impact of Middletown turbine failure - Management indicated that the turbine failure will have a $10 million impact in the first quarter, with no earnings from power production until it is operational again [46][48] Question: Expected improvement in tons handled in the industrial segment - Management noted that guidance includes a full year of the new KRT contract and modest recovery across both KRT and CMT [52]