SunCoke Energy(US:SXC)2023-11-01 21:04Financial Data and Key Metrics Changes - The company reported consolidated adjusted EBITDA of $65.4 million for Q3 2023, a decrease of $18.3 million from the record results of Q3 2022 [43] - Net income attributable to SunCoke was $0.08 per share in Q3 2023, down $0.41 compared to the prior year period, primarily due to tax adjustments and lower contribution margins [41] - The company ended Q3 with a strong liquidity position of approximately $475.9 million and a gross leverage of approximately 1.91x on a trailing 12-month adjusted EBITDA basis [15][47] Business Line Data and Key Metrics Changes - Domestic Coke segment adjusted EBITDA was $64 million with sales volumes of 1,016,000 tons, driven by lower contribution margins on noncontracted blast coke sales [44] - The Logistics business generated $8.4 million of adjusted EBITDA and handled approximately 5 million tons of throughput, down from $12.9 million and 5.7 million tons in the prior year [46] Market Data and Key Metrics Changes - The company noted weaker demand impacting logistics terminal volumes and pricing during the quarter [14] - The API2 price adjustment is expected to recover in Q4, which may positively impact the Logistics segment [46] Company Strategy and Development Direction - The company continues to focus on safely executing its operating and capital plans for full utilization of its coke-making assets [49] - The foundry expansion project was completed on time and on budget, allowing the company to grow its foundry market participation [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of the full year consolidated adjusted EBITDA guidance of $250 million to $265 million despite challenging market conditions [15] - Planned outages in Q4 are expected to impact adjusted EBITDA per ton but are already factored into the guidance [21] Other Important Information - The company announced a $0.10 per share dividend payable to shareholders on December 1, 2023 [15] - Tax law changes in the U.S. and Brazil impacted EPS, but management indicated this is a one-time event [29] Q&A Session Summary Question: What are the headwinds expected in Q4 that may lead to a sequential decline in EBITDA? - Management acknowledged planned outage work in Q4, which is factored into guidance, and noted that certain outages are largely expensed [8] Question: How do planned outages affect adjusted EBITDA per ton? - Management confirmed that planned outages lead to higher O&M costs, which do affect EBITDA per ton but are fully contemplated in the guidance [21] Question: What is the outlook for the Logistics business in Q4? - Management indicated that the API2 price adjustment is recovering, and they expect higher volumes in logistics [23] Question: What is the split between coal shipments and other shipments at CMT? - Management stated that most variability in shipments comes from coal, with the ancillary business remaining stable [26] Question: What is the expected CapEx for the fourth quarter? - Management confirmed that CapEx is expected to come in slightly above the guidance of $95 million due to inflationary pressures and preliminary engineering work on the GPI project [27][28]