SunCoke Energy (SXC) Q4 2023 earnings summary

Executive summary

• FY 2023 Adjusted EBITDA was $268.8M, above the $265M high end of guidance, supported by Domestic Coke performance amid challenging Logistics markets.

• 2024 priorities include full-capacity Domestic Coke operations, operational excellence, safety, and balanced capital allocation.

Financial highlights

• FY 2023 revenue was $2,063.2M versus $1,972.5M; operating income was $125.1M versus $153.7M.

• FY 2023 Adjusted EBITDA was $268.8M versus $297.7M; Q4 was $62.3M versus $58.9M.

• FY 2023 net income attributable to SXC was $57.5M, or $0.68 per diluted share, versus $100.7M, or $1.19; Q4 net income was $13.8M, or $0.16 per diluted share.

• Excluding tax adjustments, FY EPS declined $0.22 YoY, mainly due to lower non-contracted blast-coke margins; tax law changes drove a $0.29 per-share YoY impact.

• FY 2023 operating cash flow was $249.0M versus $208.9M; Free Cash Flow was $139.8M, above the $105M-$120M objective, with working-capital timing contributing positively.

Outlook and guidance

• FY 2024 Adjusted EBITDA guidance is $240M-$255M; net income guidance is $67M-$84M.

• FY 2024 Free Cash Flow guidance is $105M-$125M; operating cash flow is projected at $185M-$200M, capex at $75M-$80M, and cash taxes at $20M-$25M.

• Domestic Coke guidance is $238M-$245M Adjusted EBITDA on ~4.1M tons sold, or $58-$60 per ton; full-capacity operations are expected.

• Logistics Adjusted EBITDA guidance is $30M-$35M on ~19.4M tons, including ~4.1M tons of CMT coal exports and ~3.8M tons of other products.

• Lower contracted blast-coke coal-to-coke yields and weaker CMT volumes and pricing are expected to weigh on results.