SXC — SunCoke Energy, Inc.

Summary of SunCoke Energy, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Adjusted EBITDA: $56.7 million, down $9.4 million year-over-year.
• Full Year 2025 Adjusted EBITDA: $219.2 million, a decrease of $53.6 million from 2024.
• Net Loss Q4 2025: $1.00 per share, compared to a loss of $1.28 per share in Q4 2024, impacted by one-time items totaling $0.85 per share.
• Full Year Net Loss: $0.52 per share, down from a loss of $1.64 per share in 2024.
• Operating Cash Flow: $109.1 million, affected by acquisition-related costs and contract breaches.
• Dividends Paid: Approximately $41 million, maintaining a $0.48 per share annual dividend.

2. Strategic Updates and Business Highlights

• Safety Performance: Achieved a total recordable incident rate of 0.55, emphasizing a strong commitment to safety.
• Acquisition of Phoenix: Integrated Phoenix Global, contributing to growth in the Industrial Services segment, which saw an increase in adjusted EBITDA by $11.9 million year-over-year.
• Contract Extensions: Extended contracts with U.S. Steel (Granite City) and Cleveland-Cliffs (Haverhill II) through 2026 and 2028, respectively.
• Capital Allocation: Focused on financial discipline and operational excellence, with plans to continue dividends and use excess cash flow to reduce debt.

3. Forward Guidance and Outlook

• 2026 Adjusted EBITDA Guidance: Expected to be between $230 million and $250 million.
• Domestic Coke Segment: Anticipated adjusted EBITDA between $162 million and $168 million, with sales of approximately 3.4 million tons.
• Industrial Services Segment: Expected adjusted EBITDA between $90 million and $100 million, benefiting from a full year of Phoenix Global.
• Capital Expenditures: Forecasted between $90 million and $100 million, driven by Phoenix-related requirements.
• Free Cash Flow: Projected to be between $140 million and $150 million in 2026.

4. Bad News, Challenges, or Points of Concern

• Contract Breach: Ongoing breach of contract by Algoma, leading to reduced sales volumes and financial losses, with potential impacts on working capital.
• Closure of Haverhill One: Permanent closure of the facility, which could be restarted but requires significant investment; this impacts production capacity and potential revenue.
• Operational Challenges: The Middletown coke plant faced a turbine failure, affecting power production and expected earnings in the first half of 2026.
• Market Conditions: Lower terminal handling volumes and economic pressures affecting the domestic coke segment.

5. Notable Q&A Insights

• Litigation Status: The company is actively pursuing legal action against Algoma for breach of contract, with expectations to recover losses.
• Phoenix Global Contribution: Anticipated annual EBITDA contribution from Phoenix is still expected to be around $60 million, with synergies of $5 million to $10 million.
• Impact of Weather and Turbine Failure: Severe winter weather and the turbine failure at Middletown are expected to result in approximately $10 million in lost earnings in Q1 2026.
• Cost Savings from Haverhill One: Closure will lead to workforce reductions and lower operational costs, already factored into guidance.

Overall, while SunCoke Energy, Inc. faces several challenges, including contract breaches and operational setbacks, it maintains a strategic focus on growth through acquisitions and contract extensions, alongside a commitment to shareholder returns.