Executive Summary

Q3 revenue and earnings compressed on lower volumes and weaker pricing: total revenues $327.7M, diluted EPS $0.80, Adjusted EBITDA $78.5M; YoY declines reflect a 17.5% drop in sales volumes and a 6.9% lower average net selling price .
Realizations held up at ~93% of PLV FOB Australia in a falling market, but cash margin/ton fell to $48.47; management is selectively limiting spot sales and expects only slight price improvement in Q4 with continued pressure .
Blue Creek hit a key milestone (first development tons, 39k st) and remains on time and within budget; 2024 guidance reaffirmed across volumes, costs, capex, and tax rate .
Liquidity remains strong at $746M; free cash flow was -$60.6M on $122.8M of capex/mine development as Blue Creek spending ramps .
Stock reaction catalysts: continued discipline on spot volumes/realizations, potential met coal supply tightness into Australian wet season, and steady Blue Creek execution toward mid-2025 prep plant and 2Q26 longwall start .

What Went Well and What Went Wrong

What Went Well
- Blue Creek execution: commenced continuous miner development, produced initial 39k st; key surface/transport components installed; on schedule and within budget .
- Pricing discipline and realizations: gross price realization ~93% of PLV FOB Australia despite falling market; management exercising patience on spot sales and geographies .
- Balance sheet resilience: $746.4M total liquidity (cash $583.2M, LT investments $49.7M, ABL availability $113.5M) supports Blue Creek and flexibility .
- Quote: “We believe that current prices are below the global cost curve and are not sustainable… we are carefully managing spot opportunities” — CEO Walt Scheller .
What Went Wrong
- Demand/price environment: high-quality steelmaking coal prices hit a 3‑year low; PLV FOB Aus ended Q3 at $186/st (down from $212), with a September low of $163 .
- Volume and unit economics: sales volumes fell 17.5% YoY to 1.86M st; cash margin/ton declined to $48.47 from $70.05; Adjusted EBITDA margin fell to 24.0% (prior-year 34.4%) .
- Free cash flow: FCF -$60.6M as Blue Creek capex/mine development outpaced OCF ($62.2M) in a weaker market .

Financial Results

Metric	Q3 2023	Q1 2024	Q2 2024	Q3 2024
Total Revenues ($M)	$423.5	$503.5	$396.5	$327.7
Net Income ($M)	$85.4	$137.0	$70.7	$41.8
Diluted EPS ($)	$1.64	$2.62	$1.35	$0.80
Adjusted EBITDA ($M)	$145.8	$200.2	$115.9	$78.5
Adjusted EBITDA Margin (%)	34.4%	39.8%	29.2%	24.0%
Net Income Margin (%)	20.2% (calc)	27.2% (calc)	17.8% (calc)	12.7% (calc)
Consensus Revenue ($M)	N/A	N/A	N/A	N/A
Consensus EPS ($)	N/A	N/A	N/A	N/A

Notes: Wall Street consensus from S&P Global was unavailable at time of writing due to access limits; will update when accessible.

KPIs and Unit Economics

KPI	Q3 2023	Q1 2024	Q2 2024	Q3 2024
Tons Sold (000 st)	2,257	2,129	2,098	1,861
Average Net Selling Price ($/st)	$184.71	$233.91	$186.09	$171.92
Cash Cost of Sales FOB Port ($/st)	$114.66	$133.48	$123.78	$123.45
Cash Margin per Ton ($/st)	$70.05	—	—	$48.47
Adjusted EBITDA per Ton ($/st)	$64.59	—	—	$42.18
Price Realization vs PLV FOB Aus	—	~84%	~90%	~93%
Ending Inventory (000 st)	—	892	895	915

Cash Flow and Liquidity

Metric	Q3 2023	Q3 2024
Cash from Operations ($M)	$138.6	$62.2
Capex + Mine Development ($M)	$112.3	$122.8
Free Cash Flow ($M)	$26.2	-$60.6
Liquidity ($M)	—	$746.4 (Cash $583.2, LT inv $49.7, ABL avail $113.5)

Guidance Changes

Metric	Period	Previous Guidance (Q2’24, 8/1)	Current Guidance (Q3’24, 10/30)	Change
Coal sales (st)	FY 2024	7.4 – 8.2M	7.4 – 8.2M	Maintained
Coal production (st)	FY 2024	7.4 – 8.0M	7.4 – 8.0M	Maintained
Cash cost of sales FOB port ($/st)	FY 2024	$125 – $135	$125 – $135	Maintained
Capex – existing mines ($M)	FY 2024	$100 – $110	$100 – $110	Maintained
Blue Creek & discretionary capex ($M)	FY 2024	$335 – $390	$335 – $390	Maintained
Mine development costs ($M)	FY 2024	$28 – $38	$28 – $38	Maintained
SG&A ($M)	FY 2024	$55 – $65	$55 – $65	Maintained
Interest expense ($M)	FY 2024	$4 – $6	$4 – $6	Maintained
Interest income ($M)	FY 2024	$20 – $25	$20 – $25	Maintained
Income tax expense (%)	FY 2024	14% – 18%	14% – 18%	Maintained
Dividend	Q3	$0.08/sh declared 7/26 [11 in List]	$0.08/sh declared 10/25	Maintained

Key factors include planned longwall moves, index pricing, sales mix/geography, freight, potential labor terms, and inflation .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Market/pricing dynamics	Q1: Realization ~84% vs PLV; pricing pressure since March; maintained guidance . Q2: Realization ~90%; Australian supply and weak demand weighed on prices .	Prices at 3‑yr low; PLV FOB Aus $186 at qtr-end, Sept low $163; expect slight Q4 improvement but continued pressure .	Deteriorated sequentially; cautious near term.
Spot exposure & sales discipline	Q2 spot ~30% (down from 37% in Q1); full-year 25–30% .	Q3 spot 23%; continuing to be selective by geography; FY still 25–30% .	Lower spot exposure in Q3 by design; disciplined.
Regional mix	Q2 sales: 39% Europe, 38% Asia, 23% S. America .	Q3 sales: 44% Europe, 41% Asia, 15% S. America .	Europe share up; South America softer.
Transportation/logistics	Q2: Managed river lock failures via rail; cost impact modest .	Transportation costs reset on 1‑month lag; modest potential Q4 benefit .	Neutral-to-slight tailwind.
Costs	Q1: Higher royalties/labor; headcount +33% YoY; cash cost/ton $133.48 . Q2: Cash cost/ton $123.78; mix of volume and lower price-linked costs .	Cash cost/ton $123.45; production costs up on headcount/supplies; below midpoint of FY guide .	Stable near guide lower half if prices stay low.
Blue Creek progress	Q1: Seam access milestones; 2024 Blue Creek spend $325–$375M; longwall start 2Q26 . Q2: Seam access completed; dev tons expected Q3 .	First development tons (39k st) produced; on time/budget; prep plant mid‑2025; longwall 2Q26 .	On track; execution milestones achieved.
Volumes outlook	Q2: H2 volumes tempered by three longwall moves and holidays .	Q4 shipments to land near midpoint of full-year guidance; possibly slightly below Q3 .	Balanced management of volume vs price.
Tax rate	Low effective tax rate aided by FDII and depletion .	Continued tax benefits; 14–18% FY guide reaffirmed .	Stable.

Management Commentary

Strategic positioning: “With our high-quality asset base, highly flexible cost structure and a high-performing workforce, we are well positioned to capitalize on improved global steel demand when the market turns” .
Market view: “High-quality steelmaking coal prices reached a three-year low… We believe that current prices are below the global cost curve and are not sustainable” .
Pricing discipline: “We are carefully managing spot opportunities and are strategically exercising patience with certain geographies” .
Blue Creek execution: “We are very pleased that the development for the first longwall panel started on schedule… and we’re on track to produce approximately 200,000 short tons… in the second half of 2024” .
Outlook nuance: “We continue to expect our markets to improve over the next quarter or 2… although we believe pricing may remain below averages we've seen in recent years” .

Q&A Highlights

Realizations and lag: Management cautioned that 93% realization reflects a falling market and could be lower if prices stabilize or rise due to a one-month lag; use Sep–Nov pricing to estimate Q4 .
Transportation cost sensitivity: Freight resets with a one‑month lag; modest incremental benefit possible in Q4 .
Q4 shipments cadence: Expect to land around the midpoint of full‑year sales guidance; Q4 “very similar, maybe slightly below” Q3 given fewer production days .
Blue Creek commercialization: Engaging customers ahead of 2H25 sales; initial placements likely for trials; long-term goal is contracting .
Hiring/opex: Additional ~100 hires at Blue Creek in 2025 is a preliminary view; costs go to mine development until coal is sold .

Estimates Context

Consensus revenue/EPS from S&P Global was unavailable at the time of publication due to access limits; we will update the “vs. estimates” view when accessible. Given reaffirmed guidance and lower spot exposure, estimate revisions may drift lower on unit revenues and volumes near term, partly offset by lower variable freight/royalties tied to prices .

Key Takeaways for Investors

Defensive quarter in a cyclical trough: HCC protected realizations and margins amid a 3‑year low in met coal prices by throttling spot sales and prioritizing mix/geography .
Blue Creek remains the core medium‑term value driver, on time and budget, with prep plant mid‑2025 and longwall 2Q26; incremental 4.8M st High Vol A positions HCC for structurally lower unit costs and higher cash generation through the cycle .
Cost performance tracking to lower half of guide with price‑linked freight/royalties and steady production costs; watch Q4 freight reset and any holiday/longwall timing impacts .
Liquidity is ample ($746M) to fund Blue Creek while maintaining dividends; negative FCF this quarter reflects investment timing rather than stress .
Near-term setup: Potential supply tightening (Australian wet season, outages) and HCC’s inventory optionality may aid realizations; management expects only slight price improvement in Q4 and remains cautious .
2024 guidance reaffirmed across volumes, costs, and capex; Q4 shipments targeted around FY midpoint with lower spot exposure (25–30% FY) .
Watchlist items: trajectory of Chinese steel exports and Indian demand, progress milestones at Blue Creek (prep plant construction, additional CM units), and any changes in labor terms or inflation pressures noted in risk factors .

Appendix: Additional Details and KPIs

Operating detail and per‑ton economics (Q3 2024):

Tons sold 1.861M; average net selling price $171.92/st; cash cost/ton $123.45; cash margin/ton $48.47; Adjusted EBITDA/ton $42.18 .
Sales mix: 44% Europe, 41% Asia, 15% South America; spot sales ~23% (primarily Asia) .
Capex/mine development: $122.8M; Blue Creek spend $93.8M in Q3; YTD Blue Creek $246.4M; cumulative $612.4M .
Inventory: 915k st at quarter‑end (includes Blue Creek development tons) .

All figures sourced from company filings and earnings materials as cited above.

WARRIOR MET COAL, INC. (HCC)·Q3 2024 Earnings Summary