SunCoke Energy (SXC) 31 Oct 242024 Q3 Earnings call transcript

Good day, and welcome to the Third Quarter 2024 SunCoke Energy, Inc. Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Shantanu Agrawal, Vice President, Finance and Treasurer. Please go ahead.

Megan. Thanks, thank Third us Quarter and discuss morning for Energy's SunCoke XXXX you morning, this joining to Good Results. Chief Senior With President me President Marinko, and Gates, and Vice Chief Executive today Officer; and are Financial Officer. Katherine Mark

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

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

now I'll that, Katherine. turn to With things over

Thanks, results. updates Shantanu. we initiatives. third well the some thank Energy's as us XXXX joining our share SunCoke announced This for quarter today's quarter you call. want few on highlights morning, to as a from Good key on I morning, and

of First, results. their would our to I thank contribution like all for employees to our

majority at from federal quarter. the that the of regulatory exemption Coke we during a delivered efforts, a of collective capacity, the of Domestic EBITDA again liabilities. to black and our $XX.X lung million Department Labor results. includes run million $X.X plants our Through had to onetime full consolidated, Our continue our received legacy strong eliminates due logistics terminals This of gain adjusted

XX-month on basis. ended at X.XXx adjusted perspective, the leverage a we a EBITDA From quarter trailing

from to and now gain Finally, we consolidated performance Department million exemption. adjusted driven full expect EBITDA of million, increasing and regulatory primarily by the $XXX logistics the Labor between our favorable $XXX year are guidance

announced us for several initiatives. other on progress to XXXX position morning to that demonstrate future. our our important discuss on well X XXXX this the progress and Slide accomplishments We key Turning initiatives key

to we're $XX United regulatory In of Federal have the to of with a payment received Labor, SunCoke's liabilities of black the black majority Department lung pleased Labor agreement our SunCoke million. First, Department exemption, eliminating of reached legacy lung onetime liabilities. million exchange totaling $XX.X regarding an for States the accrued a

we $X.X gain pretax result, during a As million the recognized a quarter.

volatility Going annual year-to-year expenses will will and our forward, greatly be legacy reduced. lower the be

will to requirements higher not addition, In subject potential be collateral SunCoke the future. in

Steel supply City to for is June to Granite XX, we've through X This lower months. the agreement we for economics compared XXXX, final the tonnage, reduced it is option current of U.S. be an may with our Second, extend extended agreement work, with part agreement the bridge The Steel coke extension with to for additional expect a project and GPI ongoing coupled before period reached. the contract. U.S.

our year. begin. barge our volume, will increase million from Finally, barge the signed which To this at a year's The per contract tons XXXX, expansion upon QX This a tons unloading agreement handling spot incremental year to facility. coal capacity be handle the $XX in expected after per KRT. X completed be contract is million builds to project business X-year project that million undertaking KRT at we we Logistics will barge-to-rail will X

I'll third quarter that, over Mark? in review to detail. to our Mark it earnings With turn

Katherine. Thanks,

gain performance prior $X.XX on but to income favorable versus share were was the the the increase of income to million in Slide attributable year XXXX, to lung up unfavorable the increase depreciation Coke in per income expense, the Turning liabilities. logistics in onetime tax X. performance was Domestic primarily Lower third $X.X SunCoke, lower by by net black The contributed expense period. elimination Net also to and quarter of partially segment. offset driven SunCoke the legacy attributable $X.XX pretax

the extinguishment domestic increase lung driven in black liabilities, on the XXXX prior EBITDA million lower higher partially of our of the for adjusted was EBITDA million CMT, benefit price logistics the adjustment APIX The adjusted and contracts. offset third terminals at volumes by was Consolidated by quarter gain yields $XX.X on compared coal-to-coke primarily period. at $XX.X take-or-pay higher year to in long-term

discuss Moving our -- X in performance Domestic to Coke Slide to performance business detail.

and adjusted volumes sales Coke X,XXX,XXX million Domestic was Third were tons. quarter coke EBITDA $XX.X

While lower was full to period the continue Domestic yields the compared driven adjusted as our to take-or-pay run contracts. at fleet on Coke by coal-to-coke primarily EBITDA year prior capacity, decrease long-term in

Due from guidance Hurricane lower to with EBITDA Coke impacts full are we've we yields weather range been year coal-to-coke to throughout Helene coupled previous range to experiencing Domestic adverse adjusted million our year from million. the $XXX QX, to guidance $XXX revising $XXX $XXX million million in the of

discuss logistics to our Now on Slide moving business. X to

the was generated in business quarter by compared quarter to logistics the driven million increase third The primarily as adjusted volumes CMT. EBITDA the of adjusted in We price terminals the XXXX benefit consistent remain in transloading million EBITDA APIX adjustment $XX.X quarter. XXXX. from $X.X Our third our in of recognized to and at full this fourth higher benefit domestic in and APIX expect QX price higher adjustment of

tons period. of of XXXX third quarter volumes X compared X.X million same the throughput combined handled million during to prior the terminals during Our as tons year

terminals of million compared Our year tons business. prior third quarter handled same tons XXXX driven to by the domestic in period, X.X new million as the during X.X

are adjusted million $XX increasing the strong to to full guidance -- year-to-date from million $XX the year. Given of logistics for segment, our results EBITDA Logistics our our we

our XX total approximately XX CMT approximately X terminals year tons, increasing tons XXXX handling guidance Additionally, million to logistics with handling domestic full million we volume are and tons. million approximately

to our liquidity discuss Now turning Slide for position to X QX.

the $XXX.X the million the to operating payment DOL Operating third quarter balance fully of dividends spent In provided receivable a was I at received million. of $XXX the with of quarter that, from flow $XXX.X $XX.X the cash we of approximately July. and and $XX.X it $XX share strong million. in activities received total, ended CapEx. in a includes of the and undrawn per ended rate $XX cash liquidity paid million Net onetime back on million a turn will million quarter SunCoke with $XXX.X cash position revolver accounts With to million cash $X.XX early million. by of this of impacts We over Katherine.

with our Thanks, the X. we've up made on We're on key Mark. pleased Wrapping progress initiatives. Slide

delivery close and logistics environmental apart our SunCoke standards we we high-quality services. maintaining safety our out and performance. dedicated and of to Robust coke XXXX, safety set central to As reliable environmental are and strong are

proven full We out a year, record selling XXXX exception. coke track is noncontracted also of our have for and the no

plan of and supply Steel operating with assets, We on safely remain our an City. and our pleased agreement have to for cokemaking executing for of U.S. against at utilization coke full agreement focused extension reached we're our capital Granite an

For the upon at our services our KRT. reliable, builds Logistics new segment, of contract existing foundation high-quality

pursuing to Domestic and in a customer project We both SunCoke. Logistics be priority base are continually segments. our Coke our broaden top for opportunities future GPI continues The to

the we on unchanged, project agreement. a fundamentals of and work strong to final continue The remain reaching

of further collateral requirements. We the higher take legacy a lung our while capital yet the black liabilities, extinguishment opportunistic our majority allocation. balanced we future always, sheet balance of strengthened also to approach As with eliminating

needs to and demonstrated the of As in the capital evaluate the need make the capital our we'll accordingly. shareholders, continuously we we've capital our allocation business, structure reward decisions past, and

full to and Finally, and achieve our increasing are performance from EBITDA now $XXX liability expect guidance factoring black in lung logistics the favorable million. between million adjusted year $XXX our the gain we to extinguishment, consolidated

open and ahead the go up let's Q&A. for that, With call

The Pipes Instructions] with comes first [Operator Riley. from question Lucas B.

on as first question of Lucas. well. is was the Giles on congrats City agreement. going? the is the guidance This increased this on Nick the My on Guys, Granite supply results strong material Where for and extension

The for coke really Steel. would to being is U.S. be a That sold question Steel. U.S.

it. should Got to we X about as think should this then we about completely any extension separate the think the project? those having relation And of it. Or items? GPI progress Got

project is This of GPI No. part the as said. we've really

project. the this So built is extension into

GPI and just inaction -- unfortunately while have to this is see on of a It's due continue the we to that. government's part work We bridge extension We wait project, this really here. as the really to that, there's of the of the U.S. stuck government's we're approving all of unfortunate a that for limbo as delay sale in really here. not result in And consequences frankly, the Steel it's parties to Nippon.

fundamentals of City we And Granite pattern strongly And along time, and continue us project everyone City project in the with we unfortunate so GPI else. believe are to impact it with to really we've as But this project. the continue extension and work has an bridges the delay contract the The in as U.S. because to that at on holding said, Granite we're a But at we're Steel. our EBITDA there. strong. this facing same it's period

that something accept it's to to -- so process we're for wait play And out. the as willing we

Katherine, crystal clear. clarification. to The you future you're there it some geographies investment from capital of that. color any Kanawha, before all X you just Maybe been million really a opportunities. Or target? the $XX over. customer I that's just mentioned Certain have looking and appreciate I on turn expansions more Could maybe capacity at perspective? expand

And terminals expand are to from the coke business capacity the and million our barge to tons. unloading speak for X can't we project logistics looking will expansion, but our in our constantly of million terms new I X plants. tons capital customers $XX at to at million rail

trying bring put certainly and we year. have had just that we're we this in it saw what business a to business place before, with of allows volume and upon this build us contract that we So the in to greater

for would to concludes CEO Katherine like over This I any session. Gates, back the closing our turn remarks. and to conference President, question-and-answer

Thank stakeholders. all and continue you XXXX, We your early for forward we build in interest all Until let's year SunCoke. look will speaking and value with again XXXX full you give to this for guidance. us continued work XXXX in discuss morning and when our then, our results again for safely to joining

conference Thank today's presentation. attending now you for The concluded. has

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