CNR Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Income: $21 million ($0.41 per diluted share), a significant recovery from a net loss of $79 million in Q4 2025.

Adjusted EBITDA: $180 million, up from $103 million in the previous quarter.

Coal Sales:

High CV Thermal: 7.7 million tons sold at $58.86 per ton (up from $58.11).

Metallurgical: 2.1 million tons sold at $122.11 per ton (7% increase).

Powder River Basin (PRB): 11.9 million tons sold at $14.39 per ton.

Cash Costs:

High CV Thermal: $42.56 per ton (up from $41.42).

Metallurgical: $92.35 per ton (down from $103.49).

PRB: $13.64 per ton (consistent with prior quarter).

Free Cash Flow: $56 million, impacted by $52 million in negative working capital changes.

Liquidity: Total liquidity of $935 million, including $413 million in unrestricted cash.

2Strategic Updates and Business Highlights

Transitioned to a fully operational platform post-merger, achieving strong production and cash cost performance.

Significant operational efficiencies noted at West Elk mine and ongoing improvements at the Pennsylvania Mining Complex.

Continued focus on shareholder returns with $47 million returned in Q1 2026 (85% of free cash flow) through share repurchases and dividends.

Successful expansion of the Core Marine Terminal and increased coal shipments to domestic utilities in the Eastern U.S.

Expansion of manufacturing capabilities in the aerospace and defense sectors, including a facility expansion and acquisition of Sawyer Composite.

3Forward Guidance and Outlook

Maintained overall guidance for 2026, with specific updates on contracted volumes:

High CV Thermal: 29.1 million tons contracted (94% of guidance).

Metallurgical: 8.3 million tons contracted.

PRB: 48 million tons contracted.

Anticipation of improved cost outcomes in High CV Thermal and metallurgical segments as mining conditions normalize and power prices stabilize.

Continued focus on cost-saving measures and operational efficiencies.

4Bad News, Challenges, or Points of Concern

Elevated cash costs in the High CV Thermal segment due to winter weather impacts and previous tough mining conditions.

Potential future margin pressure in the PRB segment due to rising diesel prices linked to geopolitical tensions in the Middle East.

Ongoing volatility in global energy markets and potential demand impacts from a global economic downturn.

Challenges in the metallurgical coal market, including oversupply and pricing pressures.

5Notable Q&A Insights

Sensitivity of High CV Thermal segment to API2 prices was discussed, with a $0.07 per ton sensitivity at a $120 API2 price.

The company has hedged some diesel costs but is cautious due to market volatility.

Insights on longwall moves and their impact on production were shared, with three moves scheduled in Q2.

Discussion on synergies from the merger highlighted a significant reduction in SG&A costs and improved marketing efficiencies.

The company remains open to M&A opportunities but has no immediate plans or certainty regarding new acquisitions. Overall, CNR reported a strong start to 2026, with improved financial performance and operational efficiencies, while navigating challenges related to cost pressures and market volatility.