CONSOL Energy (CEIX) 5 Nov 242024 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the CEIX Third Quarter 2024 Earnings Conference Call. [Operator Instructions] This call is being recorded on Tuesday, November 5, 2024.

I would now like to turn the conference over to Nathan Tucker, Director of Finance and Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us. Third Earnings Energy's Call. CONSOL to Quarter Conference XXXX Welcome

our future about comments are do forward-looking obligation which for Any statements in within in XXE considered or We of the and make SEC we release otherwise. future updating filings of or statements our outlined the of forward-looking statements XXXX. forward-looking certain any Securities we any Exchange events not are events of and undertake risks, subject have Section meaning press of to Act

We defined be which third X-K, the discussing in GAAP which will to certain also Form XXXX non-GAAP and financial is measures, also financial quarter our comparable furnished on are press posted release reconciled on to SEC website. measures our

XX-Q with the XX, for September morning. our the this ended XXXX, quarter we Additionally, SEC filed

company additional can which this includes the find You was slide regarding morning. also information posted our www.consolenergy.com, that deck supplemental website on the

our our XXXX. which will participate. following Q&A of add to head recent Jimmy and prepare me update Executive In an provide provide our third be Mitesh our merger There President and On remarks, Bob achievements Brock, prepared Braithwaite, Marketing the the liability most management Senior his also Jimmy Thakkar, Bob initiatives with remarks highlight Arch will will then year Jimmy will a before and the Resources, results. providing Financial prepared and strong quarter an on Chief for performance update an we In closing Sales. and markets, Mitesh will priorities on our today comments, update and our of on into in the session coal our as Officer; operational call Officer; with are Chief XXXX his Vice and proposed key outlook. our remainder financial Chairman President

With that, it me over turn Jimmy. to let

third very Energy financial quarter had operational performance I report a good the Nate, pleased everyone. planned in and longwall and summer planned am you, move Thank strong shutdown. very and a to despite morning, a that CONSOL maintenance

the collapse on from achieved Francis Terminal, and turn As third the we the its Key effect to level. ever highest tonnage Bridge sales Scott work quarter its page production our CONSOL PAMC Marine and

part strong of due sold level PMC since per operations testament to achieved of cash Additionally, first XXXX. are our our of the volumes, lowest and production to its These a the coal the in quarter resiliency of the cost desirability results ton product.

beginning front, operations the with On performance. safety our

third and Preparation had of XXXX. Plant the Our employee quarter Preparation Bailey each during zero incidents Itmann the Plant recordable

the below recordable with finished coal for rate total operations a incident average well underground quarter mines. Our the coal national

completed Coal move in and contributed to production to QX came the Complex planned compared the quarter to prior operated 'XX. at X.X year well the safely mines production efficiently, for tons during tons strong QX million the at in a timely, million X.X in compared The 'XX performance Mining period. longwall and Pennsylvania the which

as compared PMC. reduced third QX finished sold PMC longwall last cash due the to quarter $XX.XX purchased well tonnage We production 'XX, costs. of coal Our cost improved mainly per contractor in XXXX our to QX of for 'XX $XX.XX for was in as move ton and servicing average planned

the Complex. Itmann to on Mining Moving

quarter. due QX with including third-party and delivery a During XXX,XXX to 'XX. of to in adverse the in the supplier XXXX, the equipment sales both third which major from limited compared slight delays our XXX,XXX ongoing This quarter conditions, complex, tons tons, geological tons production was of were impairment

long deal with lead times rebuilt equipment on and to abnormally both section new continue during 'XX. We QX

delivered remaining shortly, we this the and X be first received However, was miners currently year. to end X the the of by October, possibly in expect of

expected units are productivity overall miner to of mine. the the continuous increase These

section operated during run, long-term as mine Itmann XXXX. could number productivity. expect the machines, the we quarter and our these And sections Toward we September, despite mines continuous third for retreat progressed. began will mining, Itmann the improve limited miner waited which super of being of sections in X development we While the Mine X the of of efficiency its end

Furthermore, a which at was also AMSA the continuous mine. X overall of the October, the improve [indiscernible] end of X plan miner of approved by the sections, for will efficiency

Scott X.X during much compared Rebounding to CONSOL third from to Marine X.X of quarter the capacity the our of the for tons the year Moving Bridge shipped quarter. collapse the second Terminal. Key prior export million tons the limited that quarter, XXXX million in Francis CMT

at adjusted EBITDA in $XX.X revenues cash million million. year came at compared $XX.X operating costs CMT For prior million were 'XX, the $X.X QX in finished $XX.X million, period. and CMT terminal Accordingly, to

With that, over the financial call Mitesh marketing provide the to to updates. let me and turn

you, Thank morning, good and Jimmy, everyone.

start Let an update front marketing and me contracting with on the our progress.

plants to year tons the in sold XQ ton of low PMC million X.X the overhang coal and ability winter of average and During gas sold on $XX.XX XXXX. from weather natural of ton domestic market, consume per the procure X.X ago warm In to we compared power at weighed of 'XX, coal coal additional an million an $XX.XX revenue period. as have prices inventory throughout much

XX% in However, XQ quarter third to prices recently, West more PJM had the more increased power compared 'XX. than

Appalachian the coal Northern same EVA, approximately increased over by time XX% period. to According

sentiment accelerate power the change recently optimism. by EV [indiscernible] dealers U.S. towards potential delay a indicating further retirement Duke a units demand Looking the XXXX. is to in in co-plant years of Energy several multiple to to plan in a Domestic is has due development, baseload This to growth announced in build-outs This of positive growth. expected to additional signs center retirements, ahead, are data led there and power

consumption forecast its year year. this domestic market in Company course contracts we for U.S. data backdrop, multiyear XX% to September, XXXX a energy this able increased center In forecast layer With & ago. the have in just Mackenzie to in its been by compared several during of from the

approximately ton. European quarter, is the third has recently prices resilient demand buyers cargoes which winter. the back picked typically securing are $XXX the throughout and metric APIX season, front, international the up and ahead per shoulder coal On average of remained

season softened prices. has to [indiscernible] and for prolonged coke monsoon demand Indian due pet Asia. to lower Moving

market quarterly this We ever for our has during Asia total particularly the of X.X to PMC the demand crossover due into third quarter. the more XQ elected met Southeast into and into during our of robust that However, by shipped product, product to we tons far tons which million market been was a in highest our move this and China crossover optionality year, market. level 'XX, metallurgical

coals increase market. sales coking helped has of China significantly into lifting and Our Australia coals of product the us with very this blends the out high-quality on well these ban into

to pivot once quarter the optionality among many our of the This and strategic them. quickly to highlighted serve markets again value with high-quality end-use our ability different product

we see ahead improving coal outlook for internationally, continue Looking an demand. to

upward Within its For Energy IEA XXXX report an instance, the International report, has annual its Agency year. issued Outlook. this to projected Energy the compared in coal World recently from consumption its last revision published to X% by

in due to and book We on production India, guidance. remain prices customers more the coke XXXX recent the prudent based to elected short-term when front. 'XX, contracting take approach contracting Moving contracted Throughout season a the adding midpoint to we a pet monsoon to industrial prolonged and patient to our many in on weakness XQ focused. of our become of which in have caused the

in increase expect book year. strong industrial However, demand close as out we further our our we remained markets, to has the and

XXXX. During contracted million approximately to in increased XX we XQ 'XX, our position tons

or XXXX which $XXX on of Now news was achieved net insurance of million. let cash me liability higher continued share provide claim exciting cash This flow, per XXXX. we and before operational financial income EBITDA We $X.XX efforts. $XXX and a than generated of flow on $XX the update the performances. results and our reported morning, some diluted of we free Accordingly, third our quick half million, financial of quarter in first recap providing impressive an generated management million free adjusted

During payable agreement framework debt million with Consistent a we expenditures XQ dividend, paid million, we $X return in announced $XX XXXX. million be on Resources, which November a the of and totaling $X.XX capital 'XX, our per will outlined repayments to in XX, with Arch dividend capital share shareholders. the merger made $X spent

of results 'XX, to our have insurance hard interruption And significantly claim adjusters temporary were with impacted. work potential to incident. calculate as related we to Q Due been quarter closure into [indiscernible] second the the at business our such, the a

of claim, we a mid-October, and the final As by settlement formal submitted we XXXX. to end reach hope of

operations an agreements assurance what of the mechanism pay treatment to in located we Pennsylvania, approximately liabilities perpetual recent the with Trust The requirements. funnel scope XX establish will believe by our managed legacy facilities water on let's and in finalized CONSOL. Now Water Pennsylvania bonds reduce In first, and industry liability of will to these consists early October, our to surety to water time mining or long-term to DEP a a management provide and mechanism X/X exposure for financial total be Treatment as move all an terms the Fund over alternative in we treatment Global our turn, magnitude, initiatives. which liabilities of most collateral legacy for establishes

tied asset retirement account our and ] legacy legacy approximately all of facilities related surety liabilities bonds environmental obligations. for approximately of to [ XX% The XX% our

million We fund have until including annual initial $XX on agreed the to million valuation, based $X reaches a minimum contribution earnings.

reduced and grows fund the released value will cash DEP. over the by bonds of PA the As surety be time,

treatment bond water is eventually footprint and be $XXX PA For will comparison, approximately surety all our million released.

of in within part fund environmental an effort in This This to surety a to underscores XX a PA was our management million contribution paid days $XX due to fund result the DEP. commitment initial fully proactive action million. by approximately into puts XX October will being legacy of aggregate. total has and of agreement, released XX the $XX initial make the As the close, voluntary liability bonds the million with approach balance bond $X subject of of approximately facilities certain into agreed CEIX reduction and contribution which stewardship. in of

for provide Now quick update me our on let outlook a XXXX.

the PMC we given PMC revenue per of and average sold front, the to an XQ $XX.XX at On tightening coal performance of in to $XX. updated our our strong are pricing ton range the range 'XX, the increasing midpoint

a On the coal to our PMC to range the cost average of per improved lowered top 'XX, ton front, by in of guidance $XX.XX. the cost operational end to $X $XX.XX ton we XQ performance sold per cash due of

reflecting moving sales updated to 'XX are we XX million range tons, end million of million X.X operational bottom XX volume to up XQ of Additionally, by PMC guidance our range strong tons performance. a an the

For Mining range about mining optimistic remain volume operational of XXX,XXX sales we Complex, XXX,XXX a ramp-up guidance the our to complex. XXX,XXX tons to range tons We by slower-than-anticipated our due are the lowering Itmann to retreat at and once to we approval multiple deep and ability full for the are achieve the of arrives, the the encouraged the equipment plant in of our sections section mine. the by cut ramp-up remain commencement

Lastly, are capital range. expenditures our we front, maintaining on the previous

it With that, Jimmy. let turn back me to

Mitesh. Thank you,

obtained also all with provide Resources. the we October under achieving Poland update from the and the and me October, Arch approval. of teams on continue approval the expired in final towards Hart-Scott-Rodino Let antitrust the now last very transaction. proposed Act hard regulatory with an to on required merger closing waiting [indiscernible], period satisfying clearance work merger The China, received proposed Brazil, for conditions Both

respect X, shareholder Form to still Resources the We for the occur approval filed by are end obtaining toward merger. With the 'XX. closing review, Arch on proposed S-X and SEC to the anticipate of was working QX October

areas focused be success that will up we on a XXXX, of we key believe forward. us few for will remainder moving the set For

would are and and believe together merger are either of and stronger proposed Natural foremost, be X very as Resources could formation these potential standalone. entity Resources. excited about the Core with looking We Arch we could companies the to achieve forward more X First than

come to on seamlessly But realizing obtaining ready hit as toward on effort and value major these ground will have map and full doubt executing be that is a quickly as sides. day the a coordination and X. timely X no I for Our possible. transition priorities approval, of There are road developing lot together shareholder required can both running a be synergy geared teams confidence that

are on longwall continue operations to and we to the quarter, during operations our focus up given possible. as in the set smoothly running safely fourth Second, and the well efficiently third The ran moves. run we very will as quarter,

the sold we compared of coal longwall a quarters. third achieved reduced move in cash to a quarter, prior despite per ton multiple cost Third,

spending our inflationary We focus of the on will faced reducing pressures to continue our impact we managing efforts over past the levels several and the years.

to and prioritizing are sales we filling Finally, in our out book beyond. XXXX

contrasted against market industrial patient pet coke prices the export APIX prices. We are taking durable a particularly as in approach, are low

us sell example However, highly play is of crossover its floor. market. to many the year in are which allows the into believe pet at product end-use or at product our markets, many This where ability different coke benefit near is met great prices the our art. The a desired is to

As year-to-date XXXX level tonnage sales our sales of annual already market October XX, crossover in highest history. our our into have surpassed that

As by I me employees. finish often let our recognizing do,

Despite and multiple the collapse This Port fronts. the quarter was with operational to with tandem strong bridge testament excited their grateful teams a quarter the extremely their Baltimore, timely formally transition the the great again the in dedication. diligently us plan turning the Arch CONSOL successful work team to in months. smooth running in ground Resources. The merger third on am performances for hard closing Natural very the Resource a of hit team work a coming toward curveball the team in continues work Core X and hard and to for and of developing combine proposed I with

the I final over Nate will instructions. that, With hand to back call for

Thank Jimmy. you,

now session will move to We At our this operator the call. like to to time, our provide callers. ask the please instructions of to our I'd Q&A

Instructions] [Operator

first Pipes of line Securities. question from Riley Our B. from the Lucas comes

targeting? a what is that. bit side, the of market XX breakdown years question coal? lock lastly, in million prices to for And and as And out contract are contracting? a markets the the in of the XXXX, exposure? little on for could provide commercial indices And also of price terms domestic speak stand. for front? apologies then missed able uncontracted And you I you many you could the looking on utilities book with you How what first tons, kind My tons then are sort then average on today to that of are if of But

Lucas. Bob, It's Sure.

that I that tons since I'll above of for that domestic we've securing prices, those mentioned, we marks are you tell million or was XXXX. out today. X.X in what As About you million low to there about improvement about are successful the XX are mid-XXs. been in at contracted published believe quarter. contracts. an we're that of I tell That's tons last tons XXX,XXX markets the will

it's some crossover the successful China. been mainly X.X The a been export in tell India, above mixture deals but for So those we have concluding market, the tons million of marks. into balance into I into will into you, market

This all Mitesh in to mentioned a neighborhood bright as into X.X call, million we'll has this move the us, year, spot been China probably on for China year. the somewhere told million of X.X tons

that So into we expect continue as well to next year.

X.X now, for on market, fixed a million also all those would have indices, into X.X to and are they on X.X -- you, we export power domestic. price those the breakdown floors right indexed. All of XX X.X million have X.X linked the million million ], [ arrangement, million. of all will under tell So ceilings which be and are tons I

APIX XX sitting looking XXs. average $XXX for at in roughly our million next what the we're in modeling price year, we're low And here on at today, price tons, based

In for today, the to terms as think subsides as $XX, activities our floor book, seeing coal then I continue they're low resume expecting India. more out not which monsoon see volume crossover prices, in off Diwali construction $XX right only festivals we Gulf still We've to and now. come year into of Asia, as $XX prices FOB seen and and we're also to those potential increase additional to closer also but next season the to into close coke pet we're And Brazil. sell

far we're ask opportunities, market, to go into the say term, we negotiations volumes. as but today sell, opportunities and of are domestic of go in I'd most domestic when will some seeing customers the volume that And as seeing well. XXXX, left about export the you also balance So we are for long as out

able number might you witnessed the be side. cost among Thought very drivers seeing sensitive comprehensive of so far? participate surely on you is that sales of season speak on To the disinflation to a are in this behind that some extent what peers changes. My the But second noting operational your could cost side? A that earnings to question cost we've was what you're some disinflation, answer.

you of cost, Well, at when a I think look variables. lot there's

some For on look to we some and Obviously, secondly, always us, a -- And we on to consumables are deflation the it's starting That our that as to it. watch us, of the we actually to the for ways of with suppliers. this for improve to see mine constant Lord. worked that some keep in big of a was with, we our use but all tonnage mined. try then that procurement continue of helps powers can quarter, part we production we cost something

Company. of Our line the Nathan next Martin comes from from question Benchmark

Maybe claim Key start the insurance Bridge the quickly to on due to collapse.

a You reach you the ultimate guys settlement for? year. the How we on fulfillment get the do final of to that? could project there more noted much hoping by some Can thoughts end be

the imagine, that. you the interruption companies to together for for speculate a as final our a and present can $XX-plus lot business been collapse. Bridge the has million information [indiscernible] Nate, want of submit don't claim about of on Scott a with So I putting Francis claim. Key and associated like insurance We stuff our team did

We to there. it we'll expect that number and see hold, from where goes

of Maybe year. shifting remainder over Mitesh. to Okay, the this

the price does all, per assume First ton of APIX new what price that with now? guidance,

sensitivity dollar, the say $XXX. you're But to $X.XX across Nate, for portfolio. at every be -- assuming QX, I'd honest, there's We're to we're looking $XXX. entire $X.XX is And the for assuming very low.

I'm think my a lag. just maybe at or looking tons outpaced quarter periods, end correct. is your production, some levels then that notwithstanding of so, But that does sales that of to full of get by have maybe assuming looking feasible? far, the you math And production that. towards I at Okay, some XXX,XXX it kind if range? would kind vacation bob. take higher just the so Is appreciate about is I year-to-date guidance what fourth of year

route I site. gone that or doing the mean lot partners on us of was the Baltimore. terminal. you Yes. for terms our product I a inventory inventory is that inventory we really have already in as say really been of at today. the to here good know, getting our that transportation moved inventory in Most job terminal A of sitting build, have will don't to

So simply tons arrive. And when it's market. vessels of just what at we in if timing come just CONSOL trains million did into export the look a moved X.X over when you and quarter the alone, third again,

to not that, expect We do as if QX probably in well. higher

a So it's really fourth inventory timing that to just here reduce the quarter. expect I again, would thing, in and

longwall And it, the Nate, fourth the as call, during moves on production end said we don't the we any on quarter. have of

we some see But mine, and we do goes. but However, how the holidays, the trains anything we the how and always, in that of produce same for don't We'll a way can move that QX. have it how it's week Thanksgiving well planned at in shutdown Christmas. depends see of as our

have we unexpected to always run best we can. market could and run You the as geology, but

Instructions] [Operator

from from Vertical comes Michael the question next Our Dudas of Research. line

A things. couple of

can next numbers cetera. you and are you what the [indiscernible] us I longwall et of of First, really the holes, in good. achievement -- market ratability Maybe moves operations QX. and running remind capacity mean assuming capacity things as move the what is What the of couple really the forward years? well complex terrific for [indiscernible] and production

we've in capacity, Pennsylvania as capacity the did well, everything is looking tons million XX at base. for But you're used Mining when our XX.X we Well, stated publicly goes QX, million Complex. as what if it as Yes.

look the and when have we tons And Mike, you those can market supportive. X during demonstrated was XXXX produce XXXX, very million if at over XX we years

I Excellent. appreciate that.

stronger a Secondly, out you get or of demand, weather your as market, year decipher, know rest as thinking in do for India at this set but year, you anticipating separating assuming least you're prices maybe Are the issues that get and maybe little such, next looking mix in move economic into the looking you of later coal pace the XXXX? for holidays it's activity? and Asia, a about to up normalize Bob, customers I sense to to much people for forward tough

ago, right on per Mike, not demand. and certainly today. for look se India to lot When to lack a you to APIX. couple work we you, at there's it's price doesn't coal terms of mechanism now, That coal I'll what a did the priced years we hard tell into just come how against a of coal. It's of

right of the is is going markets and it's in the demand to be think what's terms the So of us remain. volatility locking to just of patient kind there, the the I It's causing in volume. in balance now

I ability on on So be we sell and more tons. production level very a It's again, XX feel our our million price to how might of to to, if base ship can't just confident come it. in it terms spot basis

What Understood. could other? or of Do APIX the [indiscernible]? some you kind just break way X think or peak or generally make pricing staging

I is factor going tons last contracted winter weather also think determining I into mean a certainly you that will there. quarter XXX,XXX Europe. be over tell to we've I

see So are it's we're starting Inventories desire. some to low. -- certainly

LNG resurgence into come a I well. you'll back in And them still experience supply the for about you'll coals. -- demand, see Europe or do a see concerned there's U.S. just think to as think and into natural normal is I winter, they if market

this over maybe hyperscale you've your the they're an with cetera. as several capacity that time and decades demand not. power and for AI least order that an maybe just in it's out base how a And months that such? been at with could cost, dealing and generation customer XX/X uninterruptable up And put and been years the such or for exciting are firm impact future may U.S. go how it's moving et next the and that into finally, Maybe how maybe electricity expectations Great. -- kind your numbers of processing for share customers in wonders few all the

start, I'll Yes, Mike.

demand seeing get think you they're questionable. for how the it's on it. becoming electricity -- I hit mean what's and to grow and is are I continues more it growth people So going to

So I not now coal-fired of a announced and have delaying seen think even you've a giving retirements who some their are lot utilities these date.

seen concern of reports a you is think from going they get mind, But is of if there that stable where some coming I've reliability the the to And of -- primarily in they're So at intermittent kind it. that sources, the look most keep is graph, of grid now. reliability, wind and solar.

people about So things Bobby get Hence, starting are of seeing year XXXX. the we're I these believe of to why do out concerned that's has the to grid. that able reliability some extend contractual to been

at continues So grows grow. and think to their a that you'll at half at pace even if least everyone plants coal-fired is retirements then capacity run that I And higher these may the expecting, even see extend demand it further. even

was shorter thing. There just perspective, by analysis happening are as in just is Mike, long-term to And put not a well. this Things term things an SNL. in

think about XXXX, XX% amount was that around supposed so change, to stands of you between when at done analysis to coal the XXXX it's gigawatts. late XXXX If in look forecast. around XX XX and lower number at XX XX we're was I the and retire that And now plants

go And time. no Mr. question at please ahead. Tucker, this

we forward look on for for next all seeing CONSOL your We you like to Thank We'd questions, to you and you. hope thank your of Energy. this morning support call. and answered we Thank participation our your you.

Thanks, everyone.

conference call. today's concludes This

you, disconnect. everyone. now may You Thank