SunCoke Energy (SXC) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated adjusted EBITDA reached $75.3 million, including a $9.5 million one-time gain from a Department of Labor regulatory exemption that eliminated most legacy Black Lung liabilities through a $36 million payment, and net income rose to $33.3 million from $8.5 million year-over-year.

• Domestic coke plants operated at full capacity, with most sales under long-term, take-or-pay agreements, while logistics delivered strong results driven by higher transloading volumes and favorable pricing.

• Full-year 2024 consolidated adjusted EBITDA guidance was raised to $260–$270 million, reflecting improved logistics and the regulatory gain.

• The Granite City coke supply agreement with U.S. Steel was extended through June 2025 at reduced tonnage and lower economics, and a new three-year coal handling agreement was signed at Kanawha River Terminal with a $12 million expansion investment.

• S&P and Moody's reaffirmed corporate credit ratings in 2024, with Moody's revising its outlook to stable.

Financial highlights

• Q3 2024 net income was $33.3 million, up from $8.5 million year-over-year, with diluted EPS at $0.36, up $0.28 year-over-year, mainly due to the Black Lung liability gain and improved logistics.

• Q3 2024 consolidated adjusted EBITDA increased to $75.3 million from $65.4 million year-over-year.

• Q3 2024 revenues were $490.1 million, down $30.3 million year-over-year, mainly due to lower coal prices on long-term contracts.

• Cash and cash equivalents at September 30, 2024, were $164.7 million, with a fully undrawn $350 million revolver, totaling $514.7 million in liquidity.

• Operating cash flow for the first nine months was $107.9 million, including a $36 million one-time payment to the Department of Labor.

Outlook and guidance

• Full-year 2024 consolidated adjusted EBITDA guidance increased to $260–$270 million.

• Domestic Coke adjusted EBITDA guidance revised to $230–$235 million due to lower coal-to-coke yields and weather impacts.

• Logistics adjusted EBITDA guidance raised to $47–$52 million, with total logistics volume guidance at approximately 22 million tons.

• Operating cash flow guidance for 2024 lowered to $155–$165 million, reflecting the one-time DOL payment; capital expenditures projected at $75–$80 million.

• Consolidated net income expected between $85 million and $97 million for 2024.