SunCoke Energy(US:SXC)2024-05-01 18:14Financial Data and Key Metrics Changes - The company reported consolidated adjusted EBITDA of $67.9 million for Q1 2024, an increase from $67.1 million in Q1 2023, primarily driven by higher blast coke sales volumes and increased logistics terminal volumes [5][13] - Net income attributable to the company was $0.23 per share, up $0.04 compared to the prior year period [13] - The company ended Q1 2024 with a strong liquidity position of $470.1 million and gross leverage of approximately 1.86x on a trailing 12-month adjusted EBITDA basis [5][7] Business Line Data and Key Metrics Changes - Domestic coke adjusted EBITDA was $61.4 million with sales volumes of 996,000 tons, supported by full capacity operations and higher blast coke sales volumes [6] - The logistics segment generated $13 million of adjusted EBITDA, slightly down from $13.5 million in Q1 2023, with throughput volumes at domestic terminals reaching 5.5 million tons, marking the best quarter in five years [12][32] Market Data and Key Metrics Changes - The North American blast furnace coke market is estimated to produce around 8.5 million to 10 million tons, with the company holding approximately 30% to 40% of the market based on contracted volumes [62][66] - The company expects to maintain its logistics full-year 2024 adjusted EBITDA and volume guidance, which remains unchanged despite market volatility [14][30] Company Strategy and Development Direction - The company is focused on a balanced yet opportunistic approach to capital allocation, with ongoing development of the Granite City GPI project [8] - The management emphasized the importance of safety and environmental performance as central to delivering high-quality coke and logistics services [15] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term need for existing coke fleet assets, despite market changes and customer transitions to DRI [36] - The company reaffirmed its full-year adjusted EBITDA guidance range of $240 million to $255 million, indicating a strong start to the year [34] Other Important Information - The company paid $9 million in dividends at a rate of $0.10 per share and spent $15.5 million on capital expenditures during the quarter [7] - The company is actively evaluating capital needs and shareholder rewards as part of its capital allocation strategy [8] Q&A Session Summary Question: Long-term outlook for utilization rates and customer transitions - Management noted that the contract with Cliffs runs through the end of 2032 and emphasized confidence in the existing coke fleet's long-term demand [36] Question: Update on logistics segment performance - Management confirmed that Q1 was the best quarter in five years for domestic terminals, driven by increased shipments due to port congestion [28][32] Question: Insights on the Granite City GPI project - Management stated that detailed engineering for the GPI project is ongoing and they are working closely with U.S. Steel [40] Question: Market size and competitive landscape - The North American blast furnace coke market is stable, with the company maintaining a competitive position despite changes in the market [62][64] Question: Spot coke sales opportunities - Management indicated that they do not separately discuss spot blast furnace coke but confirmed that the overall market dynamics remain unchanged [72]