Earnings call transcript Q1 2023

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Operator

Good day! And welcome to the CONSOL Energy's First Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation there will be an opportunity to ask questions. [Operator Instructions]. event recorded this that note is today. being Please

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

Nathan Tucker

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

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

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

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

Officer; Vice Mitesh and On me Chief Braithwaite, Officer; Jimmy Chief our today Senior Thakkar, Connell, Dan President Strategy. Senior Bob Financial President of Brock, the Executive our of Marketing and Sales our are with call and President Vice

Mitesh on of prepared marketing, Q&A and operations. there in XXXX remainder key our program. a his will initiatives be also After our our closing Bob quarter and first the sustainability our lay our priorities remarks, and then comments, out update of return detailed will will provide which recap outlook. In will update an and his shareholder remarks, the participate. of our Dan discussion provide session a for In and Jimmy prepared XXXX achievements provide financial a XXXX on will an Jimmy

let over me to it that, With turn Jimmy.

Jimmy Brock

on many XXXX finished debt lowest earnings income, net fronts, EBITDA Nate per performances level record everyone. including adjusted CONSOL the share with good our quarterly morning Thank have Energy and net in and QX, you, we and history.

our for PAMC, cash At At performance records Marine achieved set and margin we throughput new sold. revenue per Terminal, adjusted enabled volume, we the fronts EBITDA. ton new the CMT flow This as a and of quarterly realized CONSOL highest per what average sold multiple our to record set ton revenue free generation. most we metrics, also strong for important on one us quarterly view cash

capital and further flow free strategic robust a us goals. key have strategy, to our advance some our of allocation cash We has allowed generation

since every share return quarter end In of shareholders, our it announced toward shareholder creating have fact, we enhanced program dollar debt deployed we dividends, form the buybacks in was second XXXX, of for that flow nearly or we’ve whether generated cash the of long-term reductions. value free at our of the

dividends, CEIX and Since of flow, toward $XXX free cash of $XXX million. total X% Of toward $X $XX approximately deployed, the end QX’XX, debt, position common retiring cash million $XXX million million risen outstanding yet we only has generated towards million our stock. went approximately the by $XXX have of retiring million our

pivoting the return also years, has returned return shareholder We early the XXXX, This starting our in over quarter since to our allocation percentage the reduction flow debt cash toward time, each our evidenced time. shareholders been in over capital then shareholder by in and free of continued program. growth implementing our heavily of focused fine-tuned on capital gradually late and process more more

In our fact, generation free flow cash QX’XX, of debt toward was directed shareholder versus repayments. more returns

increased. return has gross target, gradually debt closer allocation shareholder we've and moved our As closer to our

program, which cash this more this are approximately free XX% dividends. flows scale the shareholder detailed emphasize shifting on now a buybacks by up we morning we that of shortly. will to return such, update share again provide quarterly As pleased I allocating announce for over are will our

operational our performance. discuss now Let's

front, the PAMC a first the Itmann employee well rate of for continued and Plant, below ZERO our coal total quarter XXXX. On each during the with Bailey finished Preparation to safety Preparation recordable quarter X.XX, track the national Plant CONSOL The incidents Terminal incident underground of recordable which Marine had average mines.

full quarter QX the increase an tons longwalls to Fork prior in period. five due in in ‘XX million longwall Complex second improved which the PAMC. compared restart million back of Coal came at mid-December X production Mining to the Production mine operational our the Enlow at at QX ‘XX, X.X Pennsylvania of at the the compared tons capacity this us to year XXXX, brought to in

full all QX hour, the PAMC since year ended which five in were QX per X we longwalls million quarter From ‘XX standpoint, tons first a mined and operational marked measured average. to quarter productivity employee compared its at in fully by tons. XXXX least as X% ‘XX, improved which the the

cost PAMC QX compared cash ton coal front, of cost $XX.XX in the average for $XX.XX per was ‘XX. On our QX ‘XX to sold

QX longwall. supplies that inflationary we have the that our due $X.XX ‘XX. out by reflects XX performance pressures year cost point per comparison ago This been the and the an is was fifth comes months, which the While improved last leverage issue labor, to ton fixed compared on of significant globally with QX over to ‘XX

remain let's on continues and Now up production focused project. XXXX. run Itmann we our Progress to rate discuss during ramping full

section attention equipment super and the the experienced currently running section we that turning will adverse up delays sections our XXXX, second in operational be getting two of three and our CM soon. delivery continuous to third miner super we have conditions the geological of and half Following

the turned complete mine XX% development also in levels performance this quarter. We've see and to operational is as improvements work construction begun have and to underground plant our improved staffing project prep from Long-term productivity attention throughout year. optimization we've

aggregate XX,XXX during and domestic and successfully continues in complex to coal the first customers. the export sold during product Itmann XXX,XXX be of marketed and The coal tons mining Itmann of Itmann quarter. The both of third-party quarter tons produced to XXXX

As production, with securing is ramp focus up we shifting business partners. new our towards strategic

volume a QX CONSOL working Moving because X.X the year the tons Terminal. have operating we to in tons prior exciting, to ‘XX, million effort capacity. been an de-bottleneck terminal period. to above of million increase throughput tons rate representing Marine We is during This annualized quarterly to million hard XX in compared X.X an record the had its

the key Some included capacity inbound and management. of focused in the areas operational

and with been efficiencies partners have freight working of the We to terminal. on our the boost side inbound capacity transportation

times our and with on rates, vessel been vessels. optimizing We turn also times, operations efficiency, a have between trained in such loading future focusing focus turn stockpile on as areas planned

our to Through million performance, reach the strategically, now ‘XX as tons on we export markets the believe is opportunity throughput sales. PAMC we continue capacity efforts QX This and could key growth as the focus important these annually. coal also terminal approximately XX for

were came and period. adjusted cash at CMT for the $XX.X prior million million. compared costs in $X.X quarter finished at Terminal revenues EBITDA ‘XX in year QX operating $XX.X million, the CMT $XX.X million, to

will With that, turn Mitesh. over the to call I

Mitesh Thakkar

strong and first of everyone. XXXX. Jimmy for you, Thank and a good the business morning domestic We quarter book export entered with

power than was natural plants muted, However, expected burn to gas coal-fired inventories coal domestic warmer domestic at began and low prices, to grow. and winter due

product to pivot quarterly for and industrial realized $XX.XX was tons quick tons remained tons particularly respond export able Where the revenue $XX.XX sold ton markets, million a the compared the to X.X sold of the marketing PAMC more coal to at strong, average market. coal Our at team swiftly per our record in period. X.X we of million to year-ago in was demand

advantages our and offset coal from in industrial is including that export our from coal export for export industrial market the into domestic the market total into demonstrates revenue, and a realized domestic time XX% PAMC sales for us logistic E&P Overall the ability be markets, coming of importantly, it crucial market metallurgical weakness in market. the accounted history. market into companies development sales a the possess. our the power marketing unique and energy export coal generation XX% nimble to export as More outpaced first in XX% capability few crossover the This sales domestic our for to utilizing

for Furthermore, despite a forward team backdrop. our position sales million increasing opportunistically the by essence in sell our through in first XX.X market challenging backlog delivery sales increased quarter our tons XXXX,

of substantially in expand these in are is the tons industrial of decade. which part market long-term coming through this majority contracts market the the to XXXX, expect the Indian importantly, exciting, More because we

As capacity better we growing the even of we’ll work to increase the Marine be this CONSOL positioned serve Terminal, market. to

fully have near of we in XXXX. now XXXX tons and contracted XX.X marketing XQ contracted for are result a for As our efforts ‘XX, million

our and me progress sustainability and financial on let sheet discussing initiatives. provide balance update capital results our allocation Now before management an

the on continue our We make quarter. stated in to progress priority considerable financial

toward March deployed stood we of free and our cash our First, our short-term factoring When $XXX continuing debt reduce cash XX% XX $XX was of level. gross flow, in net total which to approximately debt on million. unrestricted investments, million at generated

Second, approximately our be pleased aggregate payment debt XQ’XX. report additional to redeemed an near will second I'm $XXX made pay our during first notice our million XX end million. we which fully second to million, since fully notes retire an will level lien million that of of discretionary and quarter, to submitted the $XX Loan a our redemption Term we B also retire for lien $XX Furthermore, the to notes, gross expect term. of bring in These worth downs,

liquidity strong $XXX million. the finished quarter we position Third, a of with

XXXX year-end due to our However, expected of borrowing this the revolving from March. a our million end the to liquidity facility reduction at limit was decline $XXX credit

July lenders ESG facility, during to lenders revolver our a As reminder, refinancing legacy new many multiple entering exit despite the decided due to pressures. XXXX, in

cash absorb bolstered to our in reduction. We have position order this

outstanding Finally, of price repurchases X.X float our of during average million our per public $XX approximately repurchased a our of X.X% we XQ These roughly $XX.XX for quarter share. of million stock weighted the ‘XX cash and generation. flow represented XX% free at shares also common

our million roughly our that Directors announced This generation. Board of of we to which our enhanced the morning, or share, of flow marks this dividend XX% fourth $X.XX announcing ‘XX total XQ dividend return program. Additionally, a payment per issue $XX free since will shareholder elected cash

morning, our quarter financial quarter This achieved results. Now, strong financial million which of XXXX first in let $X.XX me per or diluted $XXX our we with representing quarterly second recap a level. performance XXXX first the earnings income reported highest consecutive share share, we net per quarter

generated of $XXX XQ EBITDA finished cash of Additionally, adjusted and million flow. we with million $XXX free ‘XX

sustainability strong to creating supporting to quarter. coal the corporate our to to for technologies uses align Through our and reduce addition we global and continue Initiative aspirations. and innovative Sustainability environmental footprint, deploying strategy, operating high-value initiative, advance our seek financial our this results, developing Progress and our In Forward alternative with in while goals first we environmental

XXXX to our each areas. our we were Corporate proud Report release these March, in outlining of Sustainability In performance

projects coal-to-products could high value of For expanded create our intensity example, that coal. team CONSOL of our portfolio carbon Innovations has our uses and low expanded

targets Scope gas reduction our Importantly, emissions a priority greenhouse emission levels. by to Scope X in baseline as reduction X compared and top our corporate our to XXXX operating XX% we XXXX remain achieve seek a

today that PMC we XXXX, announce Commodities approximately expand Through achieved are have reduction with to which an now we been of to Methane the agreement Corporation Program, XX%, we Environmental have Destruction at our since a into XXXX. excited Voluntary has and piloted entered

benefit noted reduction have our to the voluntary goals, only approximately earlier, emission gas our voluntary greenhouse programs. million XXXX value gas direct between stakeholders and beyond. of spend support and we opportunity reduction as in to for to effort. Today's XXXX generate industry-leading XXXX to of The our commitment also CONSOL this emissions project fund ESG As $XX not but create and will provides seek greenhouse to sustainable an credits provides underscores performance in compliance announcement a we created

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

per On to guidance front, reiterating volume to the XX our the $XX XX are ton million XXXX. and guidance of of cash $XX we for million sales tons for PAMC range cost

to $XX. previous due reduced expected we to $XX power range APIX are PJMS of prices reducing range $XX and revenue average to per prices, to ton from realized coal a our However, sold $XX of

provide around this perspective me run. Let updated some

guidance, PJMS guidance. prices. and in current prices When PJMS our a prices power ‘XX than approximately pricing pricing are per power call, based approximately APIX forward $XX below hour factoring provided we lower prior in megawatt $XX XQ On and sensitivities fluctuations curves, last prices actual are the earnings ton prior and APIX on

dollar $X.XX of Using across $X.XX and aggregate. the sensitivities of ton per change each portfolio the a implies reduction for

a ton However, range ton, the sales per updated only implies to uplift of reduced of $X.XX through an been the book midpoint portfolio has the by optimization. $X.XX which

to Itmann range our production mine, For reiterating our we are XXXX of guidance XXX,XXX tons. XXX,XXX

to its provide Complex. production, ramp-up we run achieves the once guidance detailed Itmann intend Mining to more to Pennsylvania stated, rate previously As full similar

to front, range of $XXX million Lastly, million on XXXX. the capital guidance our $XXX for reiterating expenditure are we

back turn Jimmy. me it let to that, With

Jimmy Brock

you, Thank Mitesh.

we XXXX, we believe key few of remainder strengthen company. that our focus the will For areas a have of further

forward milestones during and drive First, we of run to are to forward. goal to rate continuing to The Itmann we full up year. our achieved multiple this ramping production with Itmann the them mine expect first quarter, continue team the push

Our completing third up activities, the the the main complex, super focus and is staffing long-term ramping section. now fully construction CM remaining

and management operation dedicated the and key their team Our members and ramp-up to Itmann team staffing remain supporting efforts.

and as by sales the remains our in our challenged. contract power traditional diverse as is quarter, for team this our high-quality leveraging approach focused end-use Second, markets generation on in evidenced opportunistic its past were even progress products, markets

and future possible book pivoting in strategically layering The our contract new arbitrage. deliver business, team focused current highest to optimizing the remains on

saw PJM power prices quarter. results despite the our strong in in APIX West You QX ‘XX this during and reduced

major capacity for Terminal a increase and the to the past the several XXXX debottlenecking the been CONSOL for of optimization capitalizing years. we've by Third, is on priority working efforts on throughput that Marine

are growing markets the in seaborne into We shifting over the time. more declines market sales offset domestic strategically to dedicated to

sales has the advantage strategic to capacity Our owning opportunity. continue the growth a CONSOL Increasing and throughput is been the that Energy. will terminal in and own export market CMT future our at expands only be for always

free our debt to flow our significant returning to we are Finally, portion our of are shareholders. generation goals quarterly as committed a complete, near reduction cash

our to we happy increase believe which return in an immediately QX are become program, ‘XX. our morning to of As flows plan quarterly free is We to this to effective such, amongst now industry-leading shareholders, shareholder XX% announce enhanced we approximately will which our return cash peers.

been our shareholder on stock to return received on and base. we've pivot based our the of is our historically flow buybacks. dividends, trading, yields our tax the attractive free This moving is dividends, we mostly forward buybacks over to intent mostly which share While focused feedback decision program efficiency is cash the from at

billion this In an to of support repurchase previously morning increased amount effort, authorized up its Board $X of through program of aggregate that we has announced December also XXXX. this our to Directors XX,

team management the discretion, shareholder the Board, the approve reminder, at a As and returns of and continuation their form will each quarter.

without many ‘XX. proud XXXX, across team, of of we multiple all that our this forefront they of to continued employees and for the them have quarterly QX possible acknowledge of and records perseverance at want our and the would keeping thank want company. the I am record posting to dedication, in in commitment trend safety none hit this hard core After extremely I results I of do. work, that compliance everything to their of and values been

worked of dedication and continues certainly their of recognize to as business phenomenal our Marine for million last efforts grow. one appreciate Lastly, the Terminal their recordable our Terminal I reached a occurred in for efforts CONSOL we man-hours to safely This want and milestone. group CONSOL XXXX, compliantly, achieving June Marine Their without just in incident employees incident. and in recordable a working

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

Nathan Tucker

Thank you, Jimmy.

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

Operator

Thank you. Instructions]. [Operator

Nathan Please question Company. Martin Our ahead. go today come first of The from Benchmark will

Nathan Martin

quarter questions. taking the on Good morning, my Congrats and Thanks, guys. operator. thanks for

Jimmy Brock

Good morning. Thanks.

Nathan Martin

Let's see.

be market million Mitesh destination So, said, in Thanks. on helpful. tons we the more an a export market. would through on Bob, believe year tons, maybe you breakdown the really pricing? all That some color XX.X get layered for additional and ’XX. those by could on I

Bob Braithwaite

X.X those tons, year about XXXX. look Sure. Nate, this you at were sold for the cadence when of million so

shipped those already. of Some

million shipping into million and Egypt. of back this into X Some industrial XXXX into will year of in be sold and the in each year. in half here X.X also and XXXX, the India and volume was markets that in about the both majority XXXX

be know price. of linked you tons, million call XX million there to all a although And the do XX.X average have built-in tons to if and ceiling, balance looking hedge And million X about $XX is on ‘XX, the APIX to at so where are floor fixed look they million the you the prices APIX, XX are you're prices those of XXXX, roughly tons sold. a today around for half if back API for it through were to ‘XX way ton the hold, XX.X

Nathan Martin

an Very committed XX.X like tons tons increase previously helpful, those ‘XX position, markets updated you. and average you price tons Thank looks Bob, those price too? And the get that. ‘XX at of mentioned for your I think then Could well? specifically, update know maybe ‘XX million XX.X. from we actuals an Bob, then breakdown an I Could guidance. get I as the we the there And between looking on appreciate in

Bob Braithwaite

Yes sure.

year all that's sitting So today million the here balance next have and X.X X.X floors price. is about will slotted X.X be are do X.X, about APIX, to X.X linked the those of export. fixed linked Of those XX.X, that we and ceilings the go which have and then with to X.X about domestic to are associated power,

XX’s, Ford’s it we're we're, those at know you powers, sold will for XXX. roughly lower that XXXX Pricing call I on call mid-XXs the know on hour. per APIX tell tons, our you the average you around price looking megawatt XX’s price XX.X. it [ph] on upper

Nathan Martin

the well cadence a first that. coming quarter back quarter then few the next get so strong. and I maybe ‘XX first maybe thoughts Got as the would thoughts production it, great could some to as any in And we on with be here of Obviously we on strong quarter then to pricing appreciate if also move quarters pricing shipments.

Jimmy Brock

let cadence. little so talk about bit me a nice, the Yeah,

quarter our is we any typically did QX, of QX past in strongest longwall This You quarters. not moves. one have know

So QX two have at one, currently QX, here hard in moves possibly two QX, upon we we'll in the how and and we going in the looking believe have longwalls. forward, run will one I depending

So in second longwall the two you'll plan possibly that in the and one and and a again have quarter then moves we'll all standpoint, is from two. by our productivity see I we'll affected think bit little a have, that QX which

So very like before be XX pretty guided still it's XX I you steady. we know I tons, accurate. we'll our million to think million guidance, still

Mitesh Thakkar

tons Nate, I lot front, say pricing the there. that export more QX. you originally some shipped we demand strong what A shipments to we our on had of actually coming out then optimization a and India. than lot We a forecasted. of and had very with of would We delays to had a say strong do domestic just And some customers a million know

price forward, we APIX prices what call reduced $XXX we're know guidance You APIX averaged, forward. obviously average was our it from assuming as and April XXX. QX going XXX; move In about QX are

APIX is So as know some you to modeling power if concerned, we're at see price certainly price we benefit that come floor. basically far there, the the could up, in as power were price then the and

upside downside only there's that, no really to potential. So it's

if prices do we we seeing back So gas see a natural warm up. summer, start creep

does think the $X certainly know I know [ph] it this gas and power contracts. if back that here us suggest later benefit seeing Ford’s net on transpire, will You year, the start you we'll

Nathan Martin

Got one before I it, And then it thanks. turn maybe over. final just

domestic you kind ‘XX XXXX, demonstrated feel they secular plan ahead XX that and in we signaled to will pressured? can level you export your million million guys you as in number to in markets maintain look Do or potential that XX grow You clearly like your decline. shipment ton be appear of exposure, continue shipments be know at have could to

you your by is go purely adjust shifts; quality fifth just hypothetical your production let's to you next highest standpoint consider would driven Would idling that the you just a you back would some longwall then know, operationally? have if demand, of about be And year believe. on, it Obviously brought which it I how longwall. say did coal down reduced from

helpful. be there thoughts Thanks. would any So

Jimmy Brock

we well that be believe Yeah, a market. certainly still there'll

always we've that’s the know You today, we where as we are run to but said, to somewhere consistent market.

weekends, there, have previously tons If longwalls. run opportunity, need we can is we'll we stated, to continue if So the we run our on market five an holidays. you as I more know

through of look side demand at Now, falls been the we've it. – let's other if that. off, obviously If

So can Mining of Complex. in yes, lot and we Pennsylvania a we have flexibility – optionality the

frequently we throttle and longwall could is But back the be run the the quality, could of coal or we're that run we four a even three. one things meet we needed if said, we and So quite of spec the market. we could that want allows us now at goes where we fifth into that to operation lower products it we in sulfur to, Enloe segregate longwall move the as shipping that have Fork, to to if and certainly on produce

exactly will that. marketing has back margin. we our to highest always cash the whatever run our So we team run comes objective with, been, to And

So five is, control. if running longwalls four, only demand we about worry we or it's that whatever the things

can no we'll run controlling per generate. we be focused if So highest less and there's obviously making ton the laser our and on demand, cost margin we'll

Mitesh Thakkar

still And back different But the drives Nate, the is you lot playbook we the at prices, think and have what successfully run even do. fact, and been pivot a a we markets and history, able same. of if take the at look in demand to to lower step I

the more with capacity Now, expanded optionality even terminal. we have at the

Nathan Martin

and Great! Best Jimmy today thoughts, your luck! of I and time for Mitesh, those guys. appreciate thanks

Jimmy Brock

Yep. Thanks, Nate.

Operator

next Our Please Lucas today Pipes of Securities. B. from will question Riley come go ahead.

Lucas Pipes

start and everyone you to strong on very XXXX. congrats operator, Thank a very much,

Jimmy Brock

Lucas. Thank you,

Lucas Pipes

those how thoughts I what over three would those bed. you the looking the next on thoughts want all appreciate your and quarters? that. to where are that. you the to you. sell your is as appreciate it of sell expect I put eager Thank contract Also book to quarters, tons yet two to you sold? Are on to to of be ask about to XXXX would relates balance Would

Jimmy Brock

our mean XX the million maybe exports XX million XXXX. think could I I tons. getting even case. Yes, so million Call I tons last that's it in I close tons, XX Lucas, call see still that think I to mentioned

throughput That As tons the is million to do in at pretty confident million, to call much means terminal export, feel least XX left another sell domestic. we in we saw basically tons, doesn't able potentially nine, that. it we to ability nine which so even QX, leave XX million for would XX our

think you are utilities out, did From to markets in are If kind there's a RFPs we're a through a think how that there certainly get high-CV especially of on like going out of summer lot side. going in wait-and-see Once we you'll quarter. to be I remain longer-term the deals patient. and come appetite a there more for think of in onto out more I But I And going to us. there's to volumes the international domestic an sense we're coals. some the certainly first position. see we that that, there's lot high-quality, just standpoint, makes plays see know now, opportunity summer, for Obviously tap opportunity to secure domestic

we still with that can to if we're discussions on our one book. add to customers find So makes continue in deals, long-term for and certainly we'll sense,

Lucas Pipes

quarter you you early, between based up any for way sensitivity and be domestic it the terms to mix have what under of those XXXX. to belt, APIX now shifted? the your with I and And PJM very That's sensitivity helpful. one quarter sensitivities mentioned on And prices your And wonder might how export? for a in but last XXXX little same expect frame

Jimmy Brock

so So let's start power. with for XXXX,

it puts at the megawatt power is, right year. at $X.XX balance we're for $XX right us modeling hour I'll price, only in of for call left, the tons a what there's ton. upside around floor our That there per about so looking really we're So basically and now, just say, the

we PJM West the if $X.XX $X, our uplift an have to about portfolio. to increase So were price

very a APIX both there But a provide little time. just And up it's to and sensitivity ton. any around for this same Similar the are prices, close down price. the it's XXXX, early obviously to APIX at to sensitivity on too directions $X.XX

Mitesh Thakkar

portfolio. have time-to-time also that from the we Lucas, remember And optimized

sensitivities book if sensitivity you guidance example and QX, were the we at way just optimize a the those some means for as APIX that able as would That additional the power, upside. So look were hasn't on to we imply. two much able declined our to create in

I a good that, always hold. to think going perspective, sensitivities they and that modeling are on why focus necessarily from mean that's doesn't we'll continue are but to

Lucas Pipes

It's way on that in thermal that. that? for What come the especially bit fair to square seeing don't a just see Last market a them, job in you the under held have would good so on MetCo we've prices in markets they Seaborne seaborne of side, that. How good now, prices contrast market when on you beat you question pressure. the much. seaborne up to in hold today? very side you are the Thank seen

Mitesh Thakkar

Yeah, I come say I'd so mean, have both off a bit.

We've down, kind into level floor a a think of side also of thermal XXX found the trade come prices but lot we've it On we India Egypt. those we've and seen India. seen CFR MetCo obviously to which prices, call against I

over turn to at But in heading market we're When expect reenergize, a into sell India, our a is that's go season. even still monsoon to So as demand as continue are expect expectations that we we're that going to into back level and obviously up. monsoon nice and we soon would profit. prices over, to

of side, challenges in out China's and the Met mute, then also we've the Nina of come after increases a lot season. now. production I just we're La Australia On seeing kind right think China of seen

back East bit, we're environment $XXX prices, still profit at is, know to history a you wall still we're off even reminded come U.S. pretty However, low nice if Coast just still pricing in a it’s have at a that that be look markets you turning Itmann. but attractive, and

Lucas Pipes

much. turn Very now. helpful. I’ll for Thank it you so over

Jimmy Brock

Lucas. Thanks,

Operator

Our of today go ahead. from Vertical Partners. Instructions] question next Michael Research [Operator Please is Dudas

Michael Dudas

Good gentlemen. morning,

Jimmy Brock

Mike. morning, Good

Michael Dudas

When shares, towards variable? flow further does what there any cash be Jimmy, for dividend? Will a regular the a Mitesh mean just that you're it leaning allocation. or maybe still free you thoughts XX% be some say to dividend? on going Is

thoughts maintenance normalize of of recurring major over you're next what look maybe or years the towards or the returns, good out couple cash out going chunk excess know go spending Any towards spending you're the years, we And completion flow you as we debt? capital of that including next your the several forming. it dedicated normalized, some Itmann since ESG are out towards really changes counts of especially to that at be or and – taking enough a to as those maybe you pretty or or going is capital the

Mitesh Thakkar

capital expenditure. we let behind start And capacity Obviously, maintenance this stand that run year. capital on mostly reaches for provided focused bulk we and as spending Michael, year is the on me making today, the you us. its guidance rate Itmann sure we’re this the Itmann of

about capital or think is I what range and in and generally provide spending $X we where over attractive enough forward how right you it greenhouse a looks spend would don't but like. that, unless once our major at gas in capital the four the there just maintenance for about Itmann XXXX now. that's some would speaking, color talked going I capital more as maintenance plan will no million think think under Pennsylvania capital. $X is on Complex of guidance more of project it the XXXX, is comes up, next to Obviously, other But than that emission Mining steady $XX we that years, stay state some this or

Jimmy Brock

of thing do capital every one we spend the of at people tell dollar Michael, return. highest we will sharebacks constantly the we is, rate on And

down So we've continued work to debt. our know paying the point, you on we've reached

of be, and pivoted of nearly tax because that continue that said the that we that need because to share cash rate and of efficiencies where free flow to I return. have believe we'll highest But we the we it have, do that. We buybacks the we is as to yields earlier,

at forward expect this going would So the of part share will capital major point, buybacks of I that our towards instead dividends. go

Michael Dudas

Understood. I Thanks appreciate that. gentlemen.

Jimmy Brock

Thank you.

Operator

question follow-up next Securities. of Pipes our is Please a from And Riley ahead. go Lucas B.

Lucas Pipes

much. so you Thank

Just quick a questions. follow-up few

could The inventory you very first one. utilities, much. wondered provide I you at the Thank an the one domestic the on first if situation on that's market. update

Jimmy Brock

season shorter above getting inventories I'd Lucas, normal. today prepared for or much little in summer Again, we're the at Yeah burn. say the a pretty bit are normal

there's summer. has much there actually demand how However, be and some to been consumed coal going that's concern pushback about this because

So but quickly how inventories, and out normal, this play normal can are again inventories all deplete. I'd seen to can say above we've

been So this we second that we're the of And, successful those those into working year. into customers market. in deferred with the again, placing half shipments were our have on export

Mitesh Thakkar

will market, And now our we Lucas, the I generation also domestic market. the of that if and look are reliant on profile at less less add power you

generation. prepared industrial quarter I think this in I domestic my export our history the in mentioned power remarks, is where outpaced first

just power, created that you diversified look markets back to step have domestic if we commitment export then a – weaker. allows well, I market think of power, is and a and serve, here export we between MetCo on very business the us stronger which as crossover, think take at industrial, from I pivot or ultimately book export depending

levels inventory we we think are helping I cognizant from U.S. going inventory normalize that in move So away domestic of coal because be will a the normalize, to market. are as we and way levels

Lucas Pipes

you, Thank follow-up actually me to that And question. my takes Mitesh.

the have would could peers all Any market. that be of domestic flexibility. Not your anecdotes appreciated. Thank pivot that response? You a flexibility talk any have industry to seaborne you share you. Is of to there supply

Jimmy Brock

Well, of demand. increase, I Again, see on we it's will seen forward. you going about that Lucas, here haven't obviously domestically side supply a the think and supply all lot don't

So are as XX% our domestic you customers know, probably repeat. of

we as as So this through is that inventory haven't not far been anything before levels.

our work inventories and help do We that. have to adjust sometimes customers to with

correct. But think is come normal if a Bobby I back to we summer, have work,

I domestically U.S. in levels haven't I don't think you and here we're begin not huge seen yet. the do don't spike. we point think you will, think I will then to because production those at a the normalize you where see can inventory that

Lucas Pipes

And you curtailed or potentially production come lower would in i.e., expect mines a utilization see rate? getting to

Mitesh Thakkar

are going generally first, already from Lucas, going which first we see. to speaking, response with make and see any So a the you're try sure starting to thing you're utilities, is commodities to

required You're you're to see to more going pushbacks, inventory see running have that. space of going are out inventory, because or than they they right, so

will more going of it production or up, that's think start I already come to burning The shows But sort some there some response, are already. to terms opportunity see happening starting try terminal an think And here. is coal be export thing, not should that discussion of good space producers we move where elsewhere, but market, enough in warrants a and summer huge I a utilities to here. coal, you're unless would see which response

Lucas Pipes

in sale, very gauge versus capital I to reweight your question. and wanted that are rank interest Where earlier? M&A There return another assets to the that and color you market industry opportunities maybe That's for helpful. outlined some portfolio. the Thank you would for then MetCo

Jimmy Brock

right think along. I opportunity the to it's come Well,

and of said we have at, would If to we those. it projects I strongly line on the come lot or look would but when or opportunity very of sense, at that to comes consider a the one deals get likely side metallurgical the down previously, make haven't happen. either mean just look we most one one, we've can't As at certainly be that valuations that we out look along. seen makes we

very thing that is look one our that reserves Now, to at surrounding about we are in proximity or closer there. continue we adding Itmann to mine are optimistic and

at that if that. this that. it. in we we're front for haven't at if be us and on we in sense we would to and But makes do to sense, shareholders But definitely wherewithal found to most metallurgical time, side make have that would of our did the obligated look certainly everything the point comes us, So it the something

Lucas Pipes

to much everyone. luck you very Thank the color. additional Very appreciate of Best much.

Jimmy Brock

Lucas. Thanks,

Operator

Please next is Research go from ahead. Our question Dudas a follow-up Vertical of Partners. Michael

Michael Dudas

thanks. Yes,

the your thoughts market, about the total maybe shift updated your utility thinking side, customer market your from the the with share domestic States base you on United into which on sense, away baseload As repeat in export I could was there makes is significant years year where maybe retirement, two any have plant or thought you how five, baseload speeding three, these to opportunities ago? given is be, a up, say changing that changes for will customers out maybe would seven your towards closure, And deferring?

Jimmy Brock

something That's years we that started a great ago. looking at question. It's

domestic we XXXX, So there's when serve no meaningful the here today, Bobby? at I us until look for retirements plants sitting currently think you

Bob Braithwaite

Correct.

Jimmy Brock

southeast, those, future least markets. that's one and that knows we're going in and where see pressured. power at on forward. so to do going the to the will that's taking be they the particularly plants down who that in in and that it's when that continue to, for focus But continue be and and are our we northeast one But XXXX here the at to look here wanted, And we to we we those, believe of to the trying of international the more coal more main in reasons

Bob Braithwaite

takes ELG Yeah just follow-up on effect. Mike, that. to rule when is Yeah, XXXX the

to to typical So see I book, that's what a of bit we start effect little our million tune tons. would X million, X when material domestic on call a the

if closures especially these market already next tons seaborne However, up about and we've you domestic started personal more make of have kind to and of your it markets, question the due over on plants, to toward production PJM. to going NAV announced my pivoting years, several cover is don't those that those the to follow power challenging the in certainly access it's export Lucas's to view more

Michael Dudas

it much sense. and guys. thoughts Thanks makes so Excellent

Jimmy Brock

you, Thank Mike.

Operator

the conclude Nathan will to like we over Tucker time, this session. our for question-and-answer closing I would turn at to back remarks. conference And any

Nathan Tucker

We everyone's call. your Thank our in forward you earnings on appreciate this Energy, to and and speaking interest Thank with and time morning for operator. look support you. CONSOL you, we next

Operator

you presentation your disconnect now concluded. The lines. conference may attending and Thank you today's for now is

Jimmy Brock	Chief Executive Officer
Mitesh Thakkar	President, Chief Financial Officer
Bob Braithwaite	Senior Vice President of Marketing and Sales
Dan Connell	Senior Vice President of Strategy
Nathan Tucker	Director of Finance, Investor Relations
Nathan Martin	The Benchmark Company
Lucas Pipes	B. Riley Securities
Michael Dudas	Vertical Research Partners

Core Natural Resources (CNR) 2 May 232023 Q1 Earnings call transcript