Warrior Met Coal (HCC) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked the start of Blue Creek development tons, with 39,000 short tons produced and major infrastructure milestones achieved, keeping the project on schedule and within budget.

• Net income for Q3 2024 was $41.8 million ($0.80 per diluted share), down from $85 million ($1.64 per share) in Q3 2023, reflecting lower sales volumes and prices.

• Liquidity remained strong at $746 million, with $583.2 million in cash and equivalents and $113.5 million available under the ABL Facility.

• Maintained disciplined approach to spot sales and exercised patience in certain geographies to protect margins and asset value.

• Quarterly dividend increased to $0.08 per share, with $40.5 million in dividends paid year-to-date.

Financial highlights

• Q3 2024 revenue was $327.7 million, down 23% year-over-year; adjusted EBITDA was $78.5 million (24% margin), down from $146 million (34% margin) in Q3 2023.

• Free cash flow for Q3 2024 was negative $60.6 million, compared to positive $26.2 million in Q3 2023, due to heavy Blue Creek investment.

• Cash margin per ton declined to $48 from $70 year-over-year.

• Cash and cash equivalents at quarter-end were $583.2 million.

• Diluted EPS for Q3 2024 was $0.80, down from $1.64 in Q3 2023.

Outlook and guidance

• Full-year 2024 guidance reaffirmed, with sales and production expected at 7.4–8.2 million short tons and volumes trending toward the midpoint or higher end.

• Cash cost of sales projected at $125–$135 per short ton.

• Capital expenditures for Blue Creek development expected at $325–$375 million.

• Blue Creek longwall startup expected in Q2 2026, ramping up to 4.4 million metric tons annual capacity by 2027.

• Steelmaking coal prices expected to remain under pressure in Q4 2024 due to weak global steel markets.