SXC - Earnings call transcript Q2 2024

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Operator

Good morning. Thank you all for attending the SunCoke Energy Second Quarter 2024 Earnings Call. My name is Brika, and I will be your moderator today.

[Operator Instructions]

I would now like to pass the conference over to your host, Shantanu Agrawal, VP, Investor Relations at SunCoke Energy. Thank you.

proceed. may You

Shantanu Agrawal

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

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

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

Katherine Gates

I announced Thanks, Energy's on today's to discuss we morning, detail. joining second in for us before Shantanu. This a morning, quarter over and Good call. few share to Mark thank you want results. highlights it to SunCoke turning the results

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

positions end adjusted guidance our first and achieve full in delivered X high full Our we Through year logistics domestic half quarter. EBITDA collective million quarter. coke the capacity the again adjusted during our us during of our of $XX.X had consolidated million performance plants strong at range. run the results, the tons of to year to well XXXX terminals EBITDA strong handling continue efforts, the This

Board quarterly our payment and has underlying increase We from a next also September X, XXXX. the The affected quarterly date per core reflects share. increase of the management that in stability the Directors $X.XX today XX% of team the This announced our businesses. increase and to in our dividend of Board approved of $X.XX confidence strength

Our the the approximately on adjusted X.XXx Xx of at end EBITDA XX-month remained leverage basis quarter. gross a below at trailing

executing review to to continue EBITDA key that, the $XXX to detail. Mark? XXXX With on end it focus full adjusted range now our against of initiatives earnings quarter million. our of We over achieve in second and our million $XXX guidance I'll Mark high year to to turn expect

Mark Marinko

Katherine. Thanks,

Slide to Turning X.

per year volumes of in Our versus XXXX, net net increase tax which the and by and our offset quarter expense, coke by in was pricing lower $X.XX segment. sales lower $X.XX share domestic income the was depreciation, second attributable interest up mostly SunCoke prior to period. was The driven

by quarter. lower to of XXXX adjustment second The in in to second quarter higher at due was for quarter terminals. EBITDA coke adjusted CMT, $XX.X blast adjusted transloading spot timing million $XX in and Consolidated million. Lower year volumes prior the offset results yields at cold the the price primarily logistics prior sales record decrease partially compared by APIX sales domestic benefit our volumes was coke lower driven year EBITDA of of

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

$XX.X was coke EBITDA were tons. adjusted coke XXX,XXX volumes domestic quarter Second million and sales

adjusted sales blast coke the to timing prior blast lower continued coke primarily driven year While EBITDA of capacity, record the was compared at volumes fleet due period, run in coke year domestic the period. in full prior spot to to as the sales decrease the by

Lower coal-to-coke our quarter yields second results. impacted on also contracts long-term take-or-pay

are finalized full and coke quarter sales all call, year. blast foundry first As we mentioned in the for our spot

of full year $XXX guidance and million we EBITDA full $XXX guidance are to fund million X.X Coke approximately Our sales our remains million. year coke reaffirming tons, adjusted domestic Domestic

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

Our $XX.X quarter in of to XXXX logistics in compared EBITDA second adjusted quarter second million $XX.X of the of XXXX. million the generated business

offset The our increase quarter. pricing benefit in partially from to lower APIX CMT at adjusted EBITDA due adjustment limited was primarily by higher price transloading due terminals, during to domestic the volumes

expect We the adjustment the benefit of recovery some third APIX quarter. in price

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

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

experienced in of pleased strong contributed half limited results. are first with our our costs year. to high second the We very water from which favorable and We the the in the first results segment Logistics quarters,

best Additionally, our of representing first domestic terms years. half the past a tons, volume million of performance in total in X.X terminals X handled

the first the we half. modest anticipate we a half segment the compared year, For second total solid the expect performance handling logistics from while as tons of continue, to to operating Logistics in decline

outlook coupled the us Logistics year, year of our first strong and performance, EBITDA exceed guidance. for logistics positions volume remainder to half adjusted Our the full well with XXXX

X quarter at and negatively balance impacted position receipts million by $XX.X and of activities Now cash a ended of for a fully end. with cash used the in timing was to operating discuss was $XXX of $X.X SunCoke our Net revolver approximately cash turning liquidity Slide million. undrawn QX. to quarter million the of second

spent cash to quarter are normalize operating of $XXX $XXX we on flow to our at We over in million. $X.X $XX.X operating paid year expect million reaffirming the We dividends $X.XX million remainder share of of the flow and the guidance rate million CapEx. this full cash and year, per

With the with I of back to that, a we turn it over million. total, Katherine. liquidity strong $XXX.X quarter will position In ended

Katherine Gates

up X. Thanks, Mark. on Wrapping Slide

executing our and environmental assets. strong standards of reliable safely on and is of logistics environmental priority, delivery will our We remain and our high-quality continue first and plan always, As full cokemaking operating our against performance. on SunCoke focus central and safety and to capital utilization Robust to for apart, are services. set focused coke safety we safety

also continue business to on adding focus new logistics terminals. at our We

domestic first year, driving We we broaden results of at all our finalize able half business volumes customer blast with of continue to the were while to highest with our sales are pleased coke X the for so the and future terminals full And to our last spot far efforts in years. the we our foundry new largely opportunities pursue base.

will As demonstrated we the we've past, capital in allocation. opportunistic approach yet a to pursue balanced

City business. we growth the and capital structure capital GPI reward work a the the our and allocation reflects perspective, dividend The goal long-term From shareholders, evaluate stability and on allocation continuously aligns of need project. and with shareholders to We continue the of increase strength our capital make accordingly. developing quarterly XX% our of capital the rewarding Granite we'll needs business, to our decisions

we Finally, the the year, balance in to that, million of expect very range and achieve now to of our Q&A. $XXX the With for up at million. with the of open strong pleased first half year, the year the outlook of EBITDA our $XXX guidance consolidated end are ahead we and high call adjusted full for let's with results coupled the go

Operator

Instructions] [Operator

B. from comes Your first Pipes question with Riley Securities. Lucas

Lucas Pipes

an of My first the in acquisition announcement but to expiration? how recent in coke sales question you Good on XXXX your morning, this the customer I close, largest from impacting everyone. this to still customer, light regards June your expect wondered especially has deal in contract to Canada. Obviously, future is

Katherine Gates

Yes. Lucas. Thanks,

at when don't Coke as acquisition, the overall So change far American therefore, we the look we supply as in in in the market balance. or any Stelco change and see Coke demand North no

Lucas Pipes

from displacement coming expect like any Canada example, of So in terms wouldn't you Cleveland, for into that?

Katherine Gates

change the no Well, that overall in what I was coke balance. there's said

So customer Cliffs excess the turn Stelco to customer, Stelco perspective, that another excess and that sort is for that we don't see it using opportunity is Stelco's themselves, do. our to was to Cliffs coke, used to they know would instead potentially -- of we the of an in coke if we assumption your and selling pursue took that if in will that customer. that question as what from selling decide coke But if

North what we demand, there's which always to other full sales we And would the out, no do would of aim since, macro the our to market. supply sell run change sales, coke sell and, potential to and coke either done, for foundry look spot in to seaborne blast the in customer, our that course, and coke and we've market again, American is customers

Lucas Pipes

That helpful. on that quick very follow-up A is appreciate I side. clarity. the logistics

major benefit earlier Illinois higher the First, Basin discounts see to a commented Baltimore did Gulf? are from been. getting down rerouted outage bit the volumes producer that you they then a And than have sulfur of week this any terms in

volumes expect of so for QX, QX wonder CMT? kind And in through you I terms of what

Katherine Gates

Sure.

the first in quarter and unfortunate did about the So benefit that we talked from unfortunate in in incident our with Baltimore, incident to that we first call. respect half,

see volumes that you about talk in higher us second half, we the that in having softer first half half. the the saw that's So replicated aren't due getting second a to when really

Lucas Pipes

can speak you Could you the market? to --

Shantanu Agrawal

perspective, 'XX Yes, of after -- has I really you volatile look don't kind basin that and a pricing like quite I 'XX. -- stabilized coal APIX an we right, can from the Illinois that. bit futures a if early take I at mean here, mean

half. demand change we So terminals, first what half is going not huge perspective, a a seeing from going volumes second our a the from or are through to

of for basically that's right is the So half the what our year second now. expectation

Lucas Pipes

it dividend the Very is thoughts that. example? reflection appreciate City it to increase. results to more would comes helpful. would this future a the of of I congratulations That great date, priorities is solid and Katherine, read-through on Or change any your on kind iron to if say And Granite you your then see. pig growth? to for really doesn't of

Katherine Gates

Well, absolutely.

is on with to the we project. So That U.S. ongoing. continue work GPI Steel still

growth is in project with engineering growth #X our still the focus no been to Our work focus There change opportunity. respect as and GPI has our ongoing.

I strong. important it's think that long just are And think And a be a certainly fundamentals the it's can that taken project -- time. of frustration. so I that to it's remember

fundamentals of GPI really furnace, market. ability the then to of you the the But to availability that's to Big blast River, in our plant, replicate hard coke location if the that really low-cost of iron and that ore, the high-quality about send think the

And to that in the project. so we of believe continue fundamentals strongly

work to We it continues us. Steel U.S. on it. on continue with work to

dividend, long-term our fully we increased the project on ability continue rewards So the our focus and with allocation to GPI year our increase that to dividend. the that in respect And reflects that to it increase it's capital shareholders. dividend, we'll have the third

Operator

Your from next with Co. Nathan Martin question comes Benchmark the

Nathan Martin

morning, everyone. Good

playing a stick for there the out of going some pickup, new than the quarter-over-quarter that sounds Let's CMT second coal. have secured in material a likely you talk like that business particular. obviously, about how with It forward? other big was here, you logistics at you Can and see guys

Katherine Gates

you. So We're at new thank Nathan, domestic business terminal. our seeing the

for continues sort in not at So specific that's Baltimore is but about had that our seeing in to this business. terminals, why where the of domestic we this better the we're such is this terminals. terminals talk run of well. highest that in. bridge is the last for unfortunate seeing customers, business CMT volumes lack But really saw can't our actual new is X but half, domestic a term you're this years. first the we've those coming that's business We And at high domestic that And

Nathan Martin

sense, quarter-over-quarter were diverted at up Baltimore? makes shipments away increase from CMT really you're that then just Katherine. on that saying Then So picking the was

Katherine Gates

first basis timing the And higher a correct. from had That's than expected in we slightly half. volumes

Shantanu Agrawal

Yes, It mean was Baltimore benefit Nate, all terminals. any did I get from the we incident. domestic at the CMT at not

I -- to pickup it's sure I'm you outstanding. but not normal. comparison roughly think comparing QX If which I you're It's that. which about, like tons you're nothing is want on Are QX-QX comparing we 'XX 'XX, make that address 'XX? versus to 'XX look if CMT, sure can is which you -- QX XXX,XXX QX talking pretty just

Nathan Martin

tons Yes. I up it or sequentially, plus because Shantanu, was minus. was looking XXX,XXX

Shantanu Agrawal

guidance, And we than market, much Okay. the mentioned, as Yes. first quarter. No, soft to I that's QX, better and our we gave remember, but the for which Obviously, market you reference normalizing. a that were when right? little very pickup I was bit very, factored and came in softer, in, volume in QX guidance, being for saw in volatile you coming we CMT if into of second the a kind with was a we of what can that's XXXX year mean, in quarter a the see kind definitely, the and original our

at And it's of normal volumes kind we just the that CMT. being

the increase and behind So logistics in domestic the the coming -- in the new the reason guidance but is majority business, from pickup the terminals. of EBITDA the

Nathan Martin

So plus that X somewhere minus you per normalize of CMT still kind of rate? is or going tons, feel kind run maybe quarter, to like million around

Shantanu Agrawal

guidance, kind of volume guidance, of in Yes. we right? the factored what's yes. the That's kind give Like

Nathan Martin

out is quarter Yes. in the second the number quarter. I -- you figure forward, the which moving what if was just expect trying or to closer the guys X.X X.X to first in

it. really guess, $XX I'll the year down guess, EBITDA. leave Got what that did $XX million Okay. I it of half to, right, I for you guys Full comes first business, the I all to $XX million. one. mean, guidance is is, logistics

your to you slow that Obviously, somewhat not, on million? in volume I you're now $XX what $X half? range. magnitude the on down to of the million, get there. forecast mean, baking for get great expectation is it mean, You did thoughts at to second it in But could expect obviously, be thoughts this exceed I But kind would the any we point?

Shantanu Agrawal

are this we new range. I at not Nate, guidance providing a mean, point,

We are guidance are to just going that range. saying we the exceed

yes, obviously, half feel plays So our based that be first second guidance very the see out comfortable to performance. mean, we'll how need I the it we range of but idea, above we get half an kind on will and

the CMT, volumes, on that kind then for for that your other the question, are Majority tonnes through X.X said we about to going we And back can of pickup first but guidance was million is domestic our volumes exceed products. terminals. think remain guidance going year unchanged. for -- the coming X.X and for so tonnes million of Like right? to those the And you is that coal full CMT

Nathan Martin

then just over quickly. shifting the Coke And business maybe to Domestic

half it still great how would do mentioned EBITDA case? get in I your ton half? expect planned guys think first You second outages, remain in thoughts. in fairly sales last the sales the here I saw quarter just you that to in half. what be impact some but you the think, And Is that typically, per second versus the maybe consistent, to

Shantanu Agrawal

produced that Yes. we the timing a as QX $XXX last production right? I this the was the million expectation, XX,XXX shipment mostly last remains case. really timing reaffirming for quarter where the can record more we 'XX. 'XX the sales the still quarter, unlike have million, of well, we of quarter what Like in and $XXX mean, aligned see, driven the guidance our sold are of Kind of year, you tonnes by than to

-- year, and are production did well of that But the mention some We is second pretty outages for the sales XXXX, have our aligned. factored we in into which in. the half second

pretty yes, So should think I it be consistent.

If -- sorry, of ready getting you getting everything. kind weakest has quarter and quarter-over-quarter, outages, production with and look with -- winter been QX at with us and for traditionally, and sequentially our

be well. similar year as we So that to story expect this

Nathan Martin

Got it. Typical seasonality.

Okay. of time. second guys Perfect. Best that I leave half. it in the appreciate I'll there. luck, you

Operator

questions no have We registered.

final remarks. would for some with back CEO Energy I Gates, So and to like President to hand SunCoke Katherine

Katherine Gates

all and your Thank interest morning continued again you this for for in SunCoke. joining us

work for create of all value safely our continue and stakeholders. Let's to

Operator

all XXXX for joining Second Earnings the Thank Energy Quarter you Call. SunCoke

now and please day. You your on rest the disconnect the may enjoy call, of

SunCoke Energy (SXC) 31 Jul 242024 Q2 Earnings call transcript