- Earnings call transcript Q3 2022

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Operator

Good day, and welcome to the CONSOL Energy Third Quarter 2022 Earnings Conference Call. All participants are in listen-only mode. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the one to Nathan Tucker, Director of Finance and Investor Relations. Please go ahead, sir.

Nathan Tucker

morning good and you everyone. Thank Energy’s Welcome call. XXXX conference quarter to CONSOL earnings third Any about Section outlined we subject comments within of filings forward-looking or statements XXXX. forward-looking considered make the release our certain statements Securities which and Act are press meaning to of future of we our have of in the and SEC XXE risks, are expectations Exchange statements undertake any obligations for forward-looking future not any events do We updating otherwise. or of

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

this XX-Q the on Additionally, we June quarterly filed quarter for our morning. the XX, Form SEC ended XXXX, with

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

call head CEO, With Q&A be on On will remarks, and Bob President third Chief that, and and today XXXX. provide then closing will XXXX over we Chief Thakkar, which Brock, Mitesh outlook. sales. Jimmy Mitesh key After participate. management, comments, our In of there Vice our In the in the turn operations remarks, Brock. a Jimmy on an of Officer, of will into to recap let provide XXXX it financial Dan update Senior as our a specific Dan will also priorities his sheet prepared quarter balance with Executive prepared performance and session Jimmy will achievements Senior his me Vice and me layout our Sales. Braithwaite, and our President Officer; our Financial Jimmy Marketing are our Connell, insights Bob Strategy;

Jimmy Brock

developments and good we CONSOL that few excited for morning to Thank a you, about. everyone. by are want highlighting start I Nate

us full October. of us preparation finish This third-party gives well marketing processing. at incremental also as to First, the the our Itmann ramping major of Itmann in first shipment mid announced the the we production to mine. of capacity and This milestone our product plant to end up Itmann recently full as our opportunity ability plant commissioning September upside control at gives

of completion mining the at nearing complex running Enlow of to located the are longwall on we expect the end The Fork fourth timeline development be quarter. we continue and our it at fifth the of Second, up Pennsylvania track and before the to remains mine.

production, to excited optionality the back bring to add the and complex. are mix We this into stability, quality to while improved

related Energy Despite third strong quarter during CONSOL XXXX. financial the multiple achieved Finally, of results production challenges.

As such, financial we announced results. XXXX our month second on based will dividend this later this which QX, morning payment, occur

We reduction our goals also of furthered debt debt quarter. portion returning the a during gross by our sizable

discuss now performance detail. more our in Let's operational

second Plant consecutive Mine, XXXX. Enlow maintained CONSOL the quarter each Mine Harvey front, zero. achieved The And Fork Marine safety have the employee Bailey, CMT of Bailey Fork incidents so our its during zero incident had quarter Terminal Enlow On Bailey and third Preparation Plant recordable Mine, and Prep employee far at our zero in XXXX. recordable

early XXXX longwall The to believe suffered moves is, and good shutdown geological finishing longwall due all a October, Production after have X.X Complex these issues to nearly period, Mining but the with the at million one came QX tons Our us recordable and challenges. compared in QX plan multiple we this million completed. move and as quarter XXXX. of are mines. X.X Coal line is at in in year-to-date a tons incident for as year news well prior times move coal production maintenance the national that rate total underground a of now operational for a in Pennsylvania the average been at PAMC plan XXXX below reduction behind

on million XX.X driven prior had million year X.X quarter of the tons these fifth XXXX performance ongoing our Kosovo As X.X QX a decreased to in DMT million were XXXX development year-to-date compared cost tons elevated was from longwall to costs to the as the to X.X was revenue cash for cash cost prior a costs and leverage as production period. also finishing due brings quarter and the with during our in chain continued Terminal our associated million at XX.XX at Marine levels a compared finished and XX.XX of adjusted reduce by CONSOL inflationary at average by resulting QX suppliers. year volume XXXX, came X.X well supply throughput ton. per the due for million at fixed compared QX, result front Terminal rate of compared came compared increase maintenance supplies, cost in an on in ton. cash our This QX challenges QX, ongoing million factors, XX.X in cost of period. per improvement million DMT XX.XX XXXX. throughput for Kosovo million of X.X XXXX QX to elevated the and to per pressures EBITDA Maintenance XXXX. The operations. cost This operating PAMC power in in in mainly at X.X deteriorating the the to ton to consistency

with major which We first September. a our the of October commissioning and loaded hit first the XXth. in milestone preparation its at processed project quarter late on train the shipped our end of coal Itmann plant, Our

bottlenecks the While now was equipment and three the of commissioned section quarter. achieving the by and we anticipate super our by fourth supply of sections delayed as of end the production third third We the prep XXXX be delivered scaling expect anticipated last the our in in run plant production to delivery on XXXX. up still rate chain call, quarter earnings it full all have beginning

decision Itmann ground that tons XX,XXX be XX,XXX three and running and the The are and coal conditions low hit encouraged Mine vol metallurgical resulted raw super expected, mining all difference tons this are The economic produced our XXXX. us once proven will of sales associated opportunity it will which sold quality to QX allow in to full coal instead sections with to coal we We of own on of end deliberate are processing, our for between and the fully stockpile operational. capture in a third-party coal. plant, selling for what we processing from production

due year XX.XX countries as third the finishing are in of highest ton India compared serve. fired which PJM On on ton hour. accelerate revenue retirements We The out incremental $XX.XX coal tight to in remains improvement global particularly per are million delaying day-ahead the in robust meet for shortages due period. our the to prioritized the QX hit in commodity ago supply. year XXXX driven per XX.XX of average a estimates demand marketing XXXX. as XXXX sector, was the averaged megawatt for X.X of Mackenzie in coal back realized in increase over QX comes coal energy product units, we at for this demand season will per revenue year XXXX result fall electricity years, pricing. BTUs $XX.XX demand in quarterly increase this to monsoon coal bring West Hub front, remains electric natural tons at PAMC be per India, power the country Henry compared and ongoing markets persistent will QX. $X.XX Europe. sold the million and over an will PAMC X.X in demand in QX the the at average power alternative internationally, power the sources. coal gas thermal seeing prices lack to and supply of BTU generation will generating prices ton Domestically In per supplies we coal million fired in coal non the to generation, of coal of The demand increased average Domestic coal strong that the our power the by export sold generation spot quarter past markets, in eight burden Wood million period. realized $X.XX in units per prior the

market forward and sales now secured As We through contracted strength, XX.X six XXXX and tons million a tons our for additional XXXX. of have sales our by million contracts this continued position for coal XXXX. X.X result contracted increased sold team opportunistically million

new out the Mine, markets business for and regarding product ongoing. of volumes successfully contracts we in our Itmann discussions coming Itmann our multiple and additional metallurgical domestic are commitments have QX of XXXX concluded a For export the portion

tons XXXX. of will Finally, we and per minimum effect tons for will through agreements third-party in XXXX. new, and of year that in minimum XXXX happy that lock at Marine X.XX are we a five secured CONSOL take run year This are million Terminal throughput code X.XX throughput of of in the and to a XXXX throughput through report XXXX million

secured financial pay provides turn minimum going will when to update. to biomes a revenue our now that, and With opportunity by shipments, CMT or expected with Mitesh PMC solid deal it is products and affect needs forward. provide coupled and visibility own shipping With for growth their own CMT these meaningful to for Itmann over our the our I call not provisions, take through this

Mitesh Thakkar

Thank you, Jimmy and everyone. good morning,

and have our begin the by on outlook. Let discussing balance before you we sheet that progress the made me front on results updating management quarterly XXXX

ongoing the our market considerable progress coal and performance. make financial our to due to strength priorities stated continue We strong on financial

made we deployed included Loan continuing levels. towards towards leases. quarter, our $XX We near-term XX of the finance cash was million, million flow, gross goal various free a generated which towards B and to million During $X payments reduce majority a which $XXX of of debt debt total of million Term

We XXXX sits first debt quarters XXX made just level now of above at three XXX of million current have our in million. total the repayments and gross debt now

our it November lien have focused moving call Loan optionality allocation the process rate us an more in is This our we additional provide sensitive, Term a will capital forward. that drop price to mid currently. firstly XXX.XX in in will on as While recently notes second B XXX.X interest versus on

$XX As step-down at October, our redemption will which end be second such, the of notes notice we XQ lien a the have price. XXXX for redeemed of submitted at during million call

that made Loan to that not bring million. quarter our included was million October towards Term will B of we downs gross pay our our in discretionary results. XXX two approximately These in Additionally, a payment third XX

our to with of debt million of free progress We debt. XXXX Due or to under a continue aggregate we significant our XQ achieving leverage ratio finished cash strengthening X.X. of reduction, net gross balance and less sheet strength, towards our and will walk just earnings goal flow continued XXX to

our with flow strong and XXXX, also generation, making balance, payment even cash unrestricted to second our $XX $XX performance. we XQ increase debt quarter our During million free dividend to due associated repayments, while and cash managed million

balance cash at million. was unrestricted Our XXX September XX

roughly We we recently consistent million. also shareholder a board morning a as third liquidity our of elected of approximately the with share of significant flow. with amounting dividend to free strong XX per free position XXrd cash are announced generation payment the of return XQ all payment quarter made program, million our ended record XXX XXth. with to conjunction XXXX November cash In to or issue on that This pleased of directors announce will of a this of November $X.XX and our to flow be shareholders XX%

of towards be most cash allocated debt flow mentioned reduction our previously, will remaining As goals. free our

located including increase the expect returns, to flow to debt share we achieved, further free gross target once level cash shareholder our the buybacks. is potential percentage of However,

align wherewithal authorization We with shareholders. Directors We with a our of the process approach the of an quarter shareholder of and previously both. each their share adjust continue us enables return. company feedback repurchases them return interest shareholders method around in or between allows our announced preferred program quarter its Board diligently to This have repurchase solicit provides increase flexibility dividends the the and of voice and last engage by best strategy believe the to and strategy to mix our its quickly to our of extension

year. the quarter a ended Now recap outlook million the performance. our We we morning, This or per net $X.XX the remainder for with me results third reported and let of strong XXX financial XQ income XXXX of diluted financial quarter share.

level since public share Our XXXX. in quarterly per earnings independent company an becoming highest

generated cash But XQ in of than adjusted lighter million million production Additionally, quarter. came and our we during XX the EBITDA expectations finished our XXXX free with flow. levels of $XXX

and to sales free generation. Our strong PAMC led margins book cash flow credit impressive cash

XX revenue to pleased On the of guidance for performance a XQ of to front, are we of derivatives. call guidance and outlook, settlements raising our expected XX range due announce we that to a the XXXX realized improved net to are PAMC, per average strong ton, commodity

megawatt for Our day hour the updated $XX quarter at forwards XXXX. midpoint of of per guidance fourth PGMS the power of assumes average

per entire the during of For prices the the realization midpoint will hour every XXXX, average portfolio power at PGMS megawatt estimate price. weighted $X.XX for full-year approximately change change by dollar XQ, we in XXXX per across our ton

chain the average to levels assumes the XQ, end extra supplier and and to quarters Given the million tons. arrange labor PAMC ongoing supply start at performance million tough to guidance the first assumes producing consistency. the date production of the across shifts the accelerating challenges XXXX of subject while fifth end XX.X our are possibility year, availability The three inconsistencies, slightly of at operational potentially volume we the improving longwall top XXXX and adding XX.XX bottom sales tweaking of the with

the third concerns soul costs, the the per as a of start higher the ton. to guidance To chain expect we challenges working we to team as work geological supply but ongoing range is bottlenecks commission possible. the quarter and now increasing of operational soon reflect around to of we in cost face hard $XX during cold December, PAMC input cash $XX to our mid As and it are

these to are fourth We cost in beginning relief of see quarter. part in early the some pressures the

the guidance. can cash per to team expect to constantly our to chain minimize as identifying of and we at these $X.XX costs as best ton overall they After revisions, cash ways diligently spent. operations is guidance quarter's compared an midpoint supply of team Our the focused our last range as improvement margins manages the on

of previously. to For are XXX,XXX reducing of a range Itmann, tonnage full-year down XXX,XXX for to tons XXX,XXX we our the guidance XXX,XXX from to tons XXXX,

Furthermore, plan in planned commissioned with expected the bottlenecks that us been of preparation earlier. startup the case the equipment, most the the has section across fourth supply caused delayed until as well. which delays occur in While slightly could midpoint world chain have is The guidance third quarter, assume our industries delivery was for was the third our as of of quarter. August

We will and all production sections for are rate full that in of be the three operational we the prepared will CM optimistic end by have run year, super starting XXXX.

expenditure capital front. Lastly, on the

on the We of year. million. million key are turn range of back priorities our the that, it With XXX to let guidance maintaining our for me XXX and Jimmy remainder touch to

Jimmy Brock

Thank you, Mitesh.

we to the continued areas out focus for set into XXXX, heading us have As key we up close a XXXX. success few of

Our is major focus on our operations.

operation laser-focused are running it we hard quarter is PAMC the to bringing have and work First, early on possible. fifth longwall and up at into as this back team the as

are rate up ramping of to the by of we hit end by we to XXXX. the run start full the also ensure Itmann ground the the to committed production Second, Mine running year,

time. us members of period proud are truly to getting their very We our and Itmann hard this work short point execution of in a dedication in the and team from exciting for

commissioned inflationary this which with and easy bottlenecks. an plant environment feat current is not supply a in relocated, year, preparation over chain We the instructed have significant in just

opportunistic and will our optionality. team market remains approach sales balance continue in to revenue visibility Third, its with

to in continue additional business XXXX expect layer for and We beyond. to

to Our duration should in to the strong benefit us ability from to market come. allow for lock years

We partners. with to hard marketing business long-term our new and secure at new work strategic are product Itmann also

major a focus. balance debt remains reducing sheet our Finally, the on

optimize accelerating ability debt progressed returns fast very this are how book. aggregate, We is our pivot a our sales to are to has approaching In XXXX pleased which point to we key goal, our gross shareholders. and with for our

future. Looking more remain the even ahead, we about excited

With should PAMC that, For to the over and which compared to back Itmann, this will both I further call upside XXXX, hand from the Nate sales add instructions. expect higher we for year. volumes

Nathan Tucker

Thank Jimmy. you,

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

Operator

And next Mr. is say Please the Instructions] Riley here, will comes from line on Pipes next mute on Thank Securities. Today's Pipes FBR go our at open, with comes your Please sir? ahead. to question will Benchmark. you. go Mr. [Operator Nathan Lucas question. question ahead. Riley our maybe I first Martin so today we B. from move Pipes,

Nathan Martin

guys. Hey, for Thanks questions. morning good taking my

there through breakdown additional Could to tons years two a tons please six previously on was to Looks an higher million low like layered between point? Thanks. totals than any you on you XXXX curves based the which XX. we in were get commentary, those that Bob, domestic XX.XX quarter think XXXX now, to update I maybe committed we then XXXX. you for export and So then could might be this XXXX, mentioned, where get XXXX to last And XXXX the for price XXs, at I the know tonnage? have at expected and in point, were mentioned mid

Robert Braithwaite

morning. good Nathan, Sure

which delivered for tons at was million. average six what then off we domestic it through your can of or would time. sold the export. by I million what fixed tons the they was balance One tons price you those over gas and thing million coal Let over utilities of about the $XXX were price at of is six be start track first calculated me to four tons sold surrounding And is competitive. And when answering to question, forwards XXXX, need we majority six through two million, that be the the pricing price, at million strategic were just those to the can commitments those looked we tons for tell power XXXX, or that we did

the in million the XXXX, you million say, when were in in XXXX. million that breakdown tons including tons there, XXXX, about optimization a tons, balance the X.X X.X look in did XXXX, at in XXXX, and again, XXX,XXX X.X would optimization I So not about we

tons. at million based power puts For on APIX XX.X now and boards gas that are today. again XXXX, where And us

XX.X can is expecting tell in XXs. are I price that you realized across additional XXXX the be We we and our also to will opportunity beyond. average upper million lock those What volumes in for had

APIX then view yielding majority left go However, over expectations XXXX pass due market, domestic of would the decided the our recent still export which an have will prices. and to with our just the sell the the for market. we to is customers premium the pricing we tons of even a fall from into the I market, suggest

we have an Regarding mentioned, to XXXX. contracted not pricing and time XXXX, you million quarter-on-quarter for we at are prepared although provide, of as X.X X.X increase to tons guidance this

we As throughout are mentioned, so long and as you supportive. is run expected XXXX five longwalls to all the beyond, market

realized So average higher see where an instance can I in XXXX. pricing or price still XXXX is

Nathan Martin

Bob, helpful Very that. I appreciate

is Just maybe business the for you forward of last this your off in prices. it your point, recent the outlook, at to one you that point business if maybe affect going APIX points guys? what there prices two have How has and affected last you fall or have seen

Robert Braithwaite

Yes.

at trip several a stockpiles refill I but storage consensus So of quickly. Obviously, their weeks is of actually Europe high going there demand customers. met Obviously, winter, gas to will tell those a I coal is just looking the to ago, because needs they the drain there, so pending rushing not little expected to normal just can there quite to stockpiles, forward. with supply made be are is a two today muted bit and you,

today on a challenge like $XXX, over on is now price. you right to concern European even prices the the I netbacks improve. is that X.XX, there is APIX fairly XX, just still bullish the and but arrives will think kind APIX just the Cal you what when how price for X.XX I I just then winter somewhat are still healthy opportunity think aware, $XXX market. long for us. to of tell that So lasts. or it still the netback looks they as

Nathan Martin

mentioned, I seven been the debt in you I return Great, another one of the all total quarter, cash you there. in $XXX to cumulatively utilize quarter maybe could will targeted dividend, of How that. million about level at also share paid obviously believe. down you $XX XXX here starting get fourth million to your appreciate balance shifting Mitesh, of look XX% guys flow around which point, you I program, guys that capital to million that the also of million, and can think through debt color XX to think Maybe Mitesh paid that repurchase down do I think some you you get then down soon already free is kind at mentioned gone you Thanks. has authorization. sheet, that sizable debt

Mitesh Thakkar

redemption for $XX is Nat. did send B October. off second here Thanks Loan in $XX lien and correct. million a another We notice million That paid of Term

is achieve we been continue. this quarter debt phase returning and program, hopefully as So the with on a reduction shareholder debt is to our XX%, will XX%, have the well, remaining the plan We announced target doing. XX% what that which shareholders level return and

We will continue debt market target sooner we to plan continuing doing that level until we than strength the with later. achieve hopefully rather achieve and the it

Nathan Martin

question, And shipping one just final Okay, thanks, then the Mitesh. logistic of side things. to maybe

you real Is can there port curious how, strike real prepare November service know, anything XXth? to has guys come for Thanks. potential lockout or do been. you Just service

Daniel Connell

Hi Nate.

I For a some improvement, very they us happen. get for hard to one, we quarter-over-quarter replace with that. obviously seen have would you hard they working know, allow with railroads, about, the to is imagine stay people are communication When and to railroad rail administration national important me it know, you constant the to strike, that a I know to think we in are that service.

bottlenecks are at important to sure can is obviously wage I hard things, from work worked remaining at that, few we believe what the that. the be that or remaining it is we I have the is and or out, at for the if are improved, continue heard is will just kind it if get we we to particularly have of heard they railroads that. or like critically us. least I'm major increases, possible. But in scheduling and said that believe service something there And as that they Of before, mode have it course,

plan I So low nationwide even to the though we don't put strap. have have rail to on worst, really a probability for very a

Operator

Thank and ahead. our comes Riley Lucas Pipes next Please question ladies B go you, Securities. from gentlemen, today at

Lucas Pipes

much morning everyone. and very you operator good Thank

of on quarter So full-year On my first the per any, question quarter pricing assume third walk that for pricing, guidance through quick is Can price. $XX the any your lower ton on appreciate is midpoint the I about is colors implies my side. the in but you math, And from XX.XX. you share down realized additional that? would us drivers? PJM the it might be able to fourth

Robert Braithwaite

hit tons, also, It are XXX,XXX have Yes, lower is do there replaced And what then my the we aware. year will on QX we PJM next for some contracts, price APIX higher did market QX. APIX took less Nate, pricing I into to head. you Lucas, you and response those mentioned, the I them one as nail PJM lower - optimization in tons. call for in are than where currently lower by tons power prices we with we moved higher land Also was down, some which is forecasted would customer, as or love that priced,

factors. So the are main those three

Lucas Pipes

very That helpful. is

much production terms some in of obviously of you component, QX, QX better. impacted volume In the But on should be issues was highlighted. these

full-year that to Thank you. the the market, in place are is to in degree pricing extent Seaport able conservatism guidance? of additional there So tons a you

Robert Braithwaite

you coal that our currently to as as If strong mentioned, customers performing now, we well railroads that shipped, And we We the where to coal. work especially are incremental is. will contracted get the will to right that, are that much the have transportation continue opportunity, putting because our partners market, is we tell demand have on do as Jimmy focus upside I peers. the of quite with in ARB export in

our QX? got on would we we is based So was QX. in potentially. get to ship the get we guidance coal our with to to our and guidance. got is thought I We say shipped where it But produced, that what what stay to would upside there

Daniel Connell

of And in to we on We moves just in don't the add as side, of longwall any QX conditions our have we Lucas us. all completed productivity and to that said I longwalls these behind geologic script. the more have most have

a certainly Of at at with QX we but that longwall things pop which we if any working going some that we bring and fifth Obviously, those feel to it we earlier-than-expected, up normal there we potential coming the then those run rate. have as are of course, upside hard well. could time, be can dealing from experience are during be tons at,

Lucas Pipes

is And side. the helpful, pricing you. then on very another question That thank

market? currently priced mostly APIX between what amount to in the of be XXXX, For what expect your you APIX be tonnage to but not is of presumably committed, to or have what export tonnage differently, exposed fully pricing to put priced what to would amount you exposed pricing then and left is

Robert Braithwaite

Yes.

can exports we have on tell a million, ceilings the APIX. which so million are we to sits about of three to today, of APIX X.X indexed have contracts. about four have about the they remain ceiling those you eight would Of I collars million contracted, and that, million I currently say four them, where million XXXX, around above still tons For floors. number of the And

place ahead, slotted three for the Looking APIX, tons we to another those balance, two in likely is India. would market. I think to million million will still the linked export would I be likely million four say, of Probably tons

APIX. So would directly say million in six total, tons to be would potentially linked I

those majority floors for protection. have ceilings of the will across However, the we and

Lucas Pipes

And you hand. helpful, That then Okay. end, thank Mitesh, on cash switching is had at topics you. quarter of $XXX million

what provide discretion to $XXX debt the really gross you this the quarter? million gross from paying-off is debt at that appears additional during current the debt target. Company's Can $XXX when meet get to keep it So target to might it you clarity remaining million on

Mitesh Thakkar

cash clarification, the restricted referenced cash just you balance as included well. Lucas, for that number

for As you like earmarked that a is know, specific purpose.

we just have portion here take have going are about March think cash of next we And a liquidity to the extended. from our here we drop off going that amount certain unrestricted So be going not to of revolver perspective, of year a off to is to that into with it, that work to in also balance account XXX-ish. of of

is of it that about there to revolving capacity, million XXX So fall is off. going

So a that of are liquidity right excess little capacity. if you bit expected think capacity, fall revolver we the revolver replacing about because off in now, the carrying

plays that to essentially net think, function the So to $XXX to But cash the flow get million into gets the said, free project have $XXX spend I eventually would And it up is the of that like we that we speaking, cash and restricted million when debt. assuming changes no that balance, restriction equation. generally removed. gets major as of we cash to into of absolute once reduction, converted, do

see So flow it. money million XX of you kind that we as spend unrestricted bucket on into would

Lucas Pipes

cash you with That the changes spring, given is liquidity you. thank And amount? that very of the hold, the next what helpful, like amount is that would to

Mitesh Thakkar

with the quarter, a was we we increase cash and unrestricted debt generated, bill. exhausted are balance on now. there as very balance we we if I any example, notice, little think what like you sheet the cash comfortable this And basically have the on the on sheet for perspective. million build, the there the all only an slight flow from probably between We buyback was $X share, dividend, that basically - and right

to So we go higher. number anticipate that don't much

Lucas Pipes

the helpful. really appreciate luck. and color Very of best Gentlemen,

Mitesh Thakkar

Thanks Lucas.

Daniel Connell

Thanks.

Operator

ahead. Dudas Please Partners. comes question Michael Instructions] [Operator Our from Research with Vertical next go

Michael Dudas

morning Good gentlemen.

their one, inventories the retirement or major your customer because the more there relative any maybe PAMC months coal, some being - do announced in can issues base a with more coals bit some market. there little normalized, U.S. to seen over more, will right the about coal questions, been the look and have committed that identify? some And in bit burn as are to in few some of domestic more you that and customers is market for are the deferrals of you a now? anticipate burn talked the XXXX past hesitancy maybe we you You or and we you in Two demand see

Robert Braithwaite

of for did over many overall winter. were side that running. a looking to coal. believe the And, were remain ahead, issues have and gas just I this is generation design, earlier quarter the economically getting balance by not that as have under the therefore utility our Mike, demand to and bought, previous coal which they for year, calls inventory, mentioned, some prepared just and XXXX. throughout this I transportation winter, from seen we and for on customers simply last But was improve seen normal would burning year, build fire expect challenge from I getting assuming happened simply strong what utilities or we coal

retirements of retirements that many our marketplace, delayed our it - to I the really announcing of plants supplied in delays. not the terms will some of are core those we the In some are we of coal call have but

this say I We heard you in be top recall not there is can just versus is also head. your consensus will have difference Jimmy have another that response. there is, in strong we off a one for the the But supply before coal of Indiana, South and demand and Carolina, many of my times today again, there the

be than see, over definition, by higher - you which to beneficial supply, the the our be So should again, us. should demand

Michael Dudas

makes That sense.

are that the in dynamics in change car XXXX expand your customer add of there they restart next noticeable capacity sustainable changes about the are customer with you coal talked replace to on XX-months? mix for six has inquiries and will and XXXX, to the your to coal to the and countries or we the do Turning over industrial end burn, the that a continued looking market be we or been they types looking or markets, into base, the quality maybe be to poised will of export need your marker, for that market and of going India you

Robert Braithwaite

remain a India call is because our India, that certainly daily of tons One will I a still is majority market the more talked on fifth long-term exports But is. will think again Most begin that going. that where thing of certainly recently, about to longwall. quality growth and ARB Jimmy up our is into just that well. end basis. highlighted strong we we on customers is demand Europe, our there coming the And still is where for us. the is placed we out talk

that coal Northern was sulfur have You be Russian low that important? and Europe, a like and coals fifth low basin is quality, to they know, the longwall the why entire to Our sulfur complex blend no higher going others. the they longer against in sulfur don't Illinois

needing Because now and Central to that or as us you is I lower sulfur South U.S. of low a and us against now Colombian, are puts So going coals. blend very differentiator African versus will you to lot beneficial Appalachia to actually which be are even sulfur, and blending, northern AP call us our critical to a peers. coals and

will for into So feel sulfur product. again, be though good still us. with a we as lower differentiator And Europe they our we a have going forward will footprint

Daniel Connell

Yes, longwall to more quality complex. only fifth about for add stability. and gives it certainly to it when helps that, optionality the longwall, our for that is overall Mike, the and fifth we just importantly, not And us think some production,

do goes. this that longwall if in ran notice other And we all as much, of far as even that. to have long of it these domestically, is as either can Bobby's then or five the don't overcome you move exporter wide So past we have the to tonnage geological pretty those on point And run have longwall, these the you one can walls, challenges there fifth tons open. much they certainly opportunity

QX back, late of in very So we have year. this to coming excited know, here that you are

Michael Dudas

That one Thank question. is analysis. final great you

contractor you labor, operating maybe stand next for As any folks budget the how the witnessed sense certainly input versus own plays labor and XXXX aside given or get seeking costs looking in are performance, where inflationary you that do year, - and relief pressures looking through just your in on to of some into given the costs, on markets your XXXX? volume maybe or

Robert Braithwaite

Yes, very a doubt tight were market. no well labor it there's there that is

staff folks as maintain here in have our much the have now. XXXX think we labor, give. can flexibility And Pennsylvania to know this mine I have certainly you complex staffed able because we look been do offer you But moving great longwall as at you benefits to forward differently forward. have for one we obviously as to them fifth think I that we to look

media out of there. is come are of of I think placed the these out They somewhat attention younger that general. with on hesitant school coal all come particularly some in to folks, to

So fine. be our and believe have about better just to run to this the talking we that longwall job mean, do of recruiting think that potential have. going to again I in will these are have labor we we and But a with we employees, excited we which we add XXXX fifth to able the to to XXXX upside XXXX. forecast to versus remain

Michael Dudas

And other costs?

Robert Braithwaite

of produce we some of I to to bit little on pressures, consumables of look relief think we some these particularly when at you a used are inflationary starting see with. the

We to certainly have you starting that. support are see came down - our with like and the markets fall, that to starting see those roof are have steel things

So we feel are seeing like some we relief.

higher things than on But I are single-digits portfolio. - to Steel we we of some but the would the rep while, along we relief We mean, inflationary had. others. we there is not you cost some high keep were want saw cost be entire some a to if our in said that, obviously it all would certainly for remember, maintain other that that. higher very prices across of have you like

don't lot actually of cost than at I higher have inflation for we in budget the the XXXX and experienced as a So think general, year. look numbers this see beyond, we we

would get forward. little cost a we we expect better as that to move So

Daniel Connell

we not one supplier in where that inputs, that been with the the work highlighted supposed issues the press suppliers is have because some just caused, been now minor same getting the and are around been areas was quality that it be area think in needs and there our struggling a just the to we deliveries in that other release delivered have control with of time. have going with equipment is is had that quarter I delays struggling the We third fourth some issues quarter. too. It in

piece be So to needs of that that a solved is the as puzzle well.

Robert Braithwaite

very times lead us And for too. now Yes. important are

As to it we forward of this budget, certain get particularly how long takes for year, look the next equipment. pieces

the for we example, spares an critical critical our need look are, So what to that at had elements we with. produce to

are Some with of those those so the control, suppliers days, trying we same store the quality have have right. are inventory and But to issues is labor I and having put mean, those. long Mitesh we the in lead people.

quality so have control not had the year may same a we that or So ago.

we failures the for on us. them, had typical with not working startups that early that are We have particularly some on of is

well. same improve the issues are constantly and have working with as them that they we So to

Michael Dudas

for thanks Gentlemen time. your

Robert Braithwaite

Thanks.

Daniel Connell

Thanks Mike.

Operator

would concludes final team any like to and I gentlemen, ladies the over conference this management the back And session. question-and-answer for turn our to remarks.

Nathan Tucker

seeing appreciate thank you. for time on our Thank Thank everyone's next support of interest quarter We this and you. forward morning We earnings you and your look to CEIX. you call.

Operator

Thank all for thank concludes conference you you. This call. presentation. We today's attending today's

disconnect You lines wonderful your have may now day. and a

Core Natural Resources (CNR) 1 Nov 222022 Q3 Earnings call transcript