Warrior Met Coal (HCC) Q4 2024 earnings summary

Executive summary

• 2024 saw strong operational performance, meeting or exceeding all guidance targets, with record production at Mine 4 and the first tons from Blue Creek, despite steelmaking coal prices at their lowest since 2021.

• Blue Creek project advanced on schedule and budget, producing 209,000 short tons in 2024, with significant capital investment and longwall production expected by Q2 2026.

• Cash from operations exceeded $367 million, supporting Blue Creek development and $43 million in dividends to stockholders.

• Maintained strong liquidity of $655 million at year-end and continued regular and special dividend payments, totaling $0.82 per share for the year.

• Adjusted EBITDA for 2024 was $447.9 million with a 29% margin, down from $698.9 million and a 41.7% margin in 2023.

Financial highlights

• Q4 2024 net income was $1.1 million ($0.02 per diluted share), down from $129 million ($2.47 per share) in Q4 2023.

• Adjusted net income for Q4 was $0.15 per diluted share, compared to $2.49 last year, mainly due to a 34% lower average net selling price, partially offset by higher sales volume.

• Q4 2024 Adjusted EBITDA was $53.2 million (17.9% margin), down from $164 million (45% margin) last year.

• Q4 2024 revenues were $297.5 million, down 18% year-over-year; full-year revenues were $1.53 billion, down 9% year-over-year.

• Free cash flow for Q4 was -$88 million, with $54 million from operations and $142 million in capital expenditures and mine development.

Outlook and guidance

• 2025 sales guidance: 8.2–9.0 million short tons; production: 7.8–8.6 million short tons.

• Cash cost of sales guidance for 2025 is $117–$127 per ton, assuming PLV at $200/ton; sustaining capex $90–$100 million; Blue Creek capex $225–$250 million; mine development $95–$110 million.

• Guidance includes 1 million short tons of High Vol A coal from Blue Creek to be sold in H2 2025.

• Contracted volume for 2025 is about 85%, with 15% spot volume.

• Key risks to outlook include longwall moves, HCC index pricing, labor contract, and inflationary pressures.