SunCoke Energy (SXC) 31 Oct 222022 Q3 Earnings call transcript

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the SunCoke Energy Third Quarter 2022 Earnings Conference Call. [Operator Instructions]. Thank you. to and conference Treasurer. like Agrawal, to now Finance VP, would turn over the Shantanu I Please ahead. go

Thanks, Dennis. quarter Good and Vice us me this President morning are Chief and thank to today Financial Mark SunCoke you Executive discuss and Officer; Energy's Marinko, Rippey, Chief third Mike XXXX and With morning results. President for Senior joining Officer.

and open live a reach Relations team. This Investor conference of being webcast on Following later Investor we Q&A. our will today. management's the free our call don't your replay for today, website, prepared be available get to the call please feel to remarks, questions section the we'll call Relations If out is on to

the documents as expectations we measures filings regarding today. our things make apply various on These now I'll today's call turn Mike. statements forward-looking today's regarding constitute on remarks non-GAAP over let financial I available Before over that the to to make turn future to things The website in Mike, forward-looking cautionary remarks statements. to discussed With SEC that, language you reconciliations are our me call. on we remind are

a joining Good highlights. turn Mark, Energy's thank and Shantanu. all today. few the results before you review SunCoke want we'll Thanks, we discuss Today it I announced third for to And morning results. to quarter us I over detail. in

best-in-class their First, of performance, like for SunCoke continued achieving safety would record I to all quarter thank while employees third results. our

delivered $XX.X million. efforts, collective at we our consolidated a EBITDA adjusted For

our and pricing. realize the customer export a the elevated continue allowed performed during to quarter, coke logistics fully favorable coke demand to we strong business of see domestic Our of segment, levels which exceptionally market. In well benefits us

impact continue to Our foundry we positive are our well. perform pleased had export on financial the with coke results. they've And and initiatives

export particularly pricing Looking softening global experiencing driven forward, uncertainties. in by markets, we're coke in economic

reliable will that approved has of pleased coke, project new to produce XXX% market. supplier facility the We foundry a our capital enable foundry that to a our Board in announce SunCoke highly Directors dual are become

for to continue We quarter foundry completed continue product. grow our will to market. SunCoke in in which is quality to see the strong This be the allow third to demand of expected XXXX project,

facility Importantly, flexibility foundry project coke blast dual will not the alternate is between the after to lose production and completed. this

Our was at X.Xx on gross of EBITDA quarter trailing leverage a XX-month at the ratio this end basis. adjusted approximately

that, third to our recognizing Lastly, EBITDA in expect guidance surpass financial to year turn to review Mark I'll our of With over full we our year-to-date high-end range detail, adjusted performance, now it million. Mark. $XXX the earnings of quarter

Mike. Thanks,

sales. Slide $XX.X export to million, for EBITDA quarter on of XXXX. driven Turning $X.X This by our primarily over higher was XXXX margin third the million quarter third increase was an adjusted increase four,

$X.XX share The from of result deferred recognition by third on quarter driven sales, tax the a the development SunCoke to forwards In benefits the net tax of research was and tax on export deferred tax $X.XX release carry up the income $XX.X valuation margin development of credit existing tax the higher credits. and to versus a year credits. per quarter, as and attributable the prior attributable as income research primarily million company recorded established benefits as allowance foreign well current for and foreign tax coke of assets period,

$XX debt million. approximately third liquidity $XX by reduced quarter cash SunCoke operating Cash position million. million. for with to and million to on We $XX during ended of generated quarter balance $XX QX. flow activities Slide CapEx approximately spent discuss Turning the our five from a our almost approximately

million. strong rate in the ended quarter. approximately quarter during In total, with dividends million of a $XXX paid also the $X.XX we position share We at $X.X the per of liquidity

to turning our six coke Slide discuss performance. domestic business to Now

Third increase driven sales million was as coke pricing. higher adjusted sales the volume quarter was on sales, of margins $XX.X compared X,XXX,XXX EBITDA adjusted the a by coke XXXX. higher sales coke tons, and period remainder EBITDA prior committed was year mainly in and export tons million $XX.X All to energy record domestic for uncontracted the same are

record anticipate remains year-to-date guidance Given unchanged Coke our million tons. approximately our surpassing performance, $XXX the volume adjusted of high-end coke guidance at million. of X.X EBITDA we domestic sales

million during pricing seven as compared across discuss third Slide was adjusted our primarily quarter to in the terminals. the business of prior $XX.X of logistics year to $XX.X business. period. to million higher EBITDA to logistics Turning increase The The the EBITDA due same generated XXXX adjusted and in volumes

compared terminals prior logistic as handled volume during approximately year quarter, period. the XXX,XXX tons tons million to prior to as the throughput during X.X compared the Our period. million year additional CMT X.X same of handled tons

existing XXX,XXX more almost driven handling handled from terminals year than the by and tons customers. domestic new for Our services same increased demand prior period,

balance through this the continue We expect the performance of strong year.

full back to logistics to turn guidance of Our $XX over that, Mike. EBITDA it is adjusted million year With I'll $XX range million unchanged.

on eight. Wrapping up Mark. Slide Thanks,

priority As and our performance always, operational safety is of the top organization.

continue focus our safely on will executing to operating against plans. efforts and Our capital

in at foundry coke markets. As I this mentioned pleased are call, with of and beginning our success we the the continued export

flexibility foundry executing allow also in coke foundry the the focused SunCoke coke We while between switch Project, foundry will on expansion to meaningfully blast which preserving to production. market, grow and are now

coke We market Although favorable significantly is realized the export coke benefit the the foundry increased remains sales of through quarter. experiencing third the and market export volatility. conditions market stable,

our is We guidance. are now seeing softening coke which in into the export market, factored

the perspective, sustained projections, are to our U.S. on focused business. GPI current a From agreement a expect with the year Granite for at continue on remain We on strategy. logistics We we Based customers terminals. solid the allocation capital progress on demand City opportunity. mutually making work our to beneficial towards with our Steel a we new logistics finish and services for our pleased growth

increased substantial continue reward shareholders also by were to last We dividends, quarter. which with XX%

progress, we expect good and make year. side, for the reducing to the continue the balance revolver of deleveraging our on balance our to continue initiatives Finally, debt

evaluate continue our reward capital and capital will on in to and our make As past, allocation shareholders to we of basis structure the have done accordingly. decisions a commitment our continuous capital we needs the business,

the of guidance that, operating the based outstanding by export we our segments, for on aided ahead million full surpass $XXX the coke let's of our and performance to EBITDA high-end favorable Finally, XXXX. Q&A. market for year, conditions, adjusted look go open call With of

the with B. first Pipes Your Instruction] question ahead. is of [Operator line from go Securities. Please Lucas Riley

the question everyone the on much, of very morning, good quarter. is job coke margin. sustainability the Good on and Thank you operator. my Mike, first

work good really So there.

foundry much. but the ton the Would kind Thank think very commented between volatility, you operations also coke shift reasonable thoughts on and a You do your of is on to appreciate sustainable you what you business? the margin the good what in think most really business? per is then

No, it's regularity excellent an when we great And obviously, question, discuss Lucas. with SunCoke. here at

we this of EBITDA. from strong saw said, very And As really were quarter export of million generated you conditions. year third the XX.X we market what tons a million benefited and produced

produced results of by took full excellent very was So we level, our by of teams, operating exceptional coke. very, work advantage those we and at a a that exporting high lot

realize come predict hard quarter. pricing we're future, and well forward, able but of to the market going have in what softened, export certainly, the off conditions to it's think third you has If and

foundries. and where about more the I of we're similar is of now, look we tad, that selling a I very So when output, to but think output produced QX that back, fact levels kind of the 'XX, down relates

quarter So 'XX. at the of as we produced full 'XX, in here the in third third output quarter we did

back third Going quarter of EBITDA. to of Slide that million generated 'XX and on we you $XX.X six, the see

type So run kind a of $XX a ton rate.

more conditions, conditions we place way run to coke third forward. in demonstrate that Again, I helps wouldn't for rate your in experienced that and in will looking some you're very be But focus return bad normalized normal more again, a volatility. would if the markets as hope going export a So quarter a you. attention. expect to positive --seaborne a

in more of terminal? reports maybe topics Lower I water about challenges that side, with helpful, Mississippi the That's it the that logistics to levels. because Switching that as and really the and And opportunity imagine well. shifts your a in traffic risk Delta? color. to you is appreciate to the an loadings are more impact lot Is CMT the then may rail a of Or low

So would you. your thoughts appreciate Thank this. on

of don't see accept see low it's Another deterioration question. inbound of don't we well hasn't we for good course Really, side been place And by to our Granite for City us. it's [coke] to to neutral supplied do neutral, any should on have have a [ph]. I the so we because become because utilize to-date facility deliveries pickup plans traffic our course, We of of rail kind and backup a water materials of most the in levels. issue keep an that us in us. large we coke in facility those

So much a company. for neutral very our

and color, you Appreciate Mike. the the team, luck. best To of

Thank it. Appreciate you.

back Instructions]. any appear further questions. remarks. Rippey I there no closing to will this be the Mike turn [Operator at to And time, now call for

Feel good again.

course on always, interest this us in your As we SunCoke. morning appreciate continued and, joining the of you call

that we'll guys again. you and end to with ahead. talking to out So, call today's Thanks forward look

joining for you call. Thank today's

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