Warrior Met Coal (HCC) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $41.8 million ($0.80 per diluted share), down from $85.4 million ($1.64 per share) in Q3 2023, with revenues of $327.7 million, a 22.6% decrease year-over-year.

• Adjusted EBITDA was $78.5 million (24% margin), down from $145.8 million (34% margin) in Q3 2023.

• Blue Creek project achieved first development tons on schedule and within budget, with $246.4 million invested in 2024 and total spend of $612.4 million.

• Liquidity remained strong at $746.4 million, including $583.2 million in cash and equivalents.

• Quarterly dividend increased to $0.08 per share, with $40.5 million paid year-to-date.

Financial highlights

• Q3 2024 revenue was $327.7 million, down 23% year-over-year; net income was $41.8 million, down 51%.

• Adjusted EBITDA for Q3 2024 was $78.5 million, a 46% decrease year-over-year.

• Free cash flow for Q3 2024 was negative $60.6 million, compared to positive $26.2 million in Q3 2023, reflecting heavy Blue Creek investment.

• Cash and cash equivalents at September 30, 2024, were $583.2 million; total liquidity was $746.4 million.

• Cash margin per ton was $48.47, down from $70.05 in Q3 2023.

Outlook and guidance

• Full-year 2024 guidance reaffirmed, with sales and production expected at 7.4–8.2 million short tons.

• Cash cost of sales (FOB port) projected at $125–$135 per short ton.

• Capital expenditures for Blue Creek development expected at $325–$375 million.

• Market conditions for steelmaking coal expected to remain under pressure in Q4 2024 due to weak global steel markets.

• Blue Creek longwall startup expected in Q2 2026, with ramp-up to 4.4–4.8 million short tons annual capacity by 2027.