SXC — SunCoke Energy, Inc.

SunCoke Energy, Inc. Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Consolidated Adjusted EBITDA: $56.5 million, down from $59.8 million year-over-year.
• Net Loss: $0.05 per share, a decrease of $0.25 compared to the prior year.
• Operating Cash Flow: Strong generation of $72.7 million.
• Liquidity: Cash balance of $104.4 million and revolver availability of $158 million, totaling $262 million.
• Coke Sales Volumes: 842,000 tons, down from 898,000 tons in the prior year.
• Quarterly Dividend: Declared at $0.12 per share, marking the 27th consecutive quarter of dividends.

2. Strategic Updates and Business Highlights

• The Industrial Services segment performed well, generating $26.2 million in adjusted EBITDA, significantly up from $13.7 million in the prior year, driven by the addition of Phoenix.
• The company is running at full capacity and is sold out for the year, with expectations for improved operational performance moving forward.
• Successful integration of Phoenix is ongoing, with anticipated synergies contributing positively to future results.
• The Middletown facility is expected to resume power production by late Q2 2026.

3. Forward Guidance and Outlook

• SunCoke reaffirmed its full-year consolidated adjusted EBITDA guidance of $230 million to $250 million.
• Domestic coke adjusted EBITDA guidance remains at $162 million to $168 million.
• The company expects to recover lost production from Q1 due to improved weather conditions and the resumption of power production at Middletown.

4. Bad News, Challenges, or Points of Concern

• The decline in adjusted EBITDA was attributed to severe winter weather, lower power sales from the Middletown turbine failure, and the shutdown of the Haverhill 1 cokemaking facility.
• The net loss reflects higher depreciation expenses and operational disruptions.
• There are ongoing costs associated with integrating Phoenix, which may temporarily impact profitability.

5. Notable Q&A Insights

• Management acknowledged that the severe winter weather and turbine issues were significant contributors to the lower performance in Q1, with expectations of a $5 million headwind from Middletown in Q2.
• The Industrial Services segment's improved EBITDA was attributed to increased terminal handling volumes and operational efficiencies, with expectations for continued growth.
• Questions regarding potential benefits from regulatory changes (Section 303 DPA) and DoD funding were met with cautious optimism, emphasizing that market demand remains the primary driver for throughput.
• There was an observed increase in demand and pricing for thermal coal exports, influenced by geopolitical factors, which could positively affect future operations.

Overall, while SunCoke faced challenges in Q1 2026, management remains optimistic about recovery and growth in the coming quarters, supported by strong operational execution and strategic initiatives.