SXC — SunCoke Energy, Inc.

Summary of SunCoke Energy, Inc. Q1 2026 Earnings Call

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, primarily due to higher depreciation, severe winter weather impacts, and lower power sales from the Middletown turbine failure.
• Operating Cash Flow: Strong at $72.7 million, with a cash balance of $104.4 million and revolver availability of $158 million, totaling $262 million in liquidity.
• Coke Sales Volumes: 842,000 tons, down from 898,000 tons in the prior year.
• Quarterly Dividend: $0.12 per share, marking the 27th consecutive quarter of dividends.

2. Strategic Updates and Business Highlights

• The Industrial Services segment showed significant improvement, generating $26.2 million in adjusted EBITDA, up from $13.7 million year-over-year, driven by the integration of the Phoenix facility and improved terminal handling volumes.
• The company is running at full capacity and has sold out for the full year, indicating strong demand for its products.
• The resumption of power production at the Middletown facility is expected by late Q2 2026, which should positively impact future performance.

3. Forward Guidance and Outlook

• Full Year 2026 Adjusted EBITDA Guidance: Reaffirmed at $230 million to $250 million.
• Domestic Coke Adjusted EBITDA Guidance: Expected to be between $162 million to $168 million.
• The company anticipates a recovery in coke operations in Q2 and expects to make up for lost production in the latter half of the year.

4. Bad News, Challenges, or Points of Concern

• The decline in adjusted EBITDA was attributed to severe winter weather, lower power sales due to the turbine failure at Middletown, and the shutdown of the Haverhill 1 facility.
• The net loss reflects challenges in operational performance and increased costs, particularly depreciation.
• There are concerns regarding the impact of winter weather on operations, which could affect future performance if similar conditions persist.

5. Notable Q&A Insights

• Management acknowledged the impact of winter weather and the Middletown turbine failure on performance, estimating a $10 million shortfall in Q1, with expectations of recovery in Q3 and Q4.
• Questions regarding the Industrial Services segment revealed that while revenues were flat, adjusted EBITDA improved due to increased terminal handling volumes and operational efficiencies.
• The potential benefits from regulatory changes and market conditions were discussed, with management indicating that demand for coal remains strong, particularly in light of geopolitical factors affecting oil and gas markets.

Overall, SunCoke Energy reported a mixed quarter with strong operational cash flow and a solid dividend policy, but faced challenges from external factors impacting production and profitability. The outlook remains cautiously optimistic with expectations of recovery in the latter part of the year.