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SunCoke Energy, Inc. (SXC) is the largest independent producer of high-quality coke in the Americas, with over 60 years of experience in coke production. The company specializes in producing coke used in blast furnace steelmaking and foundry production, as well as providing logistics services for material handling and mixing. SXC operates facilities in the United States and Brazil, leveraging innovative heat-recovery technology to enhance efficiency and sustainability.
- Domestic Coke - Produces blast furnace and foundry coke at multiple facilities in the United States, primarily under long-term, take-or-pay agreements. Most facilities recover waste heat to generate steam or electricity.
- Logistics - Provides transloading and mixing services for coal, petroleum coke, and iron ore at strategically located terminals with significant storage and handling capacity.
- Brazil Coke - Operates a cokemaking facility in Brazil under long-term contracts, generating revenue through licensing and operating fees based on production levels.
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Based on your Q1 performance, how do you justify the full year EBITDA guidance when lower domestic and blast coke sales in Q1 have clearly impacted margins, and what specific measures will you take to ensure a robust second-half pickup?
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In light of your disciplined approach to capital allocation and the deferral of portions of the planned $65 million CapEx, can you provide more specifics on what projects or maintenance activities are being deferred and the expected impact on long-term asset performance?
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Given the seasonality mentioned in your coal inventory buildup, to what extent does this buildup reflect underlying weaknesses in demand rather than typical seasonal factors, and how might this affect your cash flow moving forward?
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Considering the ongoing challenges in the spot coke market and your current practice of selling early at suboptimal prices, how do you plan to mitigate margin pressure if the pricing environment does not improve as anticipated later in the year?
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With the expiration of the Cliffs contract at Haverhill and the spread of shipments over the remaining year, what contingency plans do you have in place if the shifted timing or continued volatility in domestic coke production adversely impacts overall profitability?
| Customer | Relationship | Segment | Details |
|---|---|---|---|
Cliffs Steel | Long-term take-or-pay; major steelmaker | Domestic Coke | Revenue: $1,237.0 million (63.9% of total, 2024). A/R: $48.4 million (59% of total, 2024). |
U.S. Steel | Long-term take-or-pay; major steelmaker | Domestic Coke | Revenue: $284.6 million (14.7% of total, 2024). A/R: $8.5 million (2024). |
Recent press releases and 8-K filings for SXC.
- SunCoke Energy announced a Definitive Agreement to acquire Phoenix Global, a leading provider of mission-critical services to steel producers.
- The acquisition is set at $325 million on a cash-free, debt-free basis, representing approximately a 5.4x multiple on Phoenix’s last 12 months adjusted EBITDA of $61 million.
- The deal is expected to deliver $5 million to $10 million in annual synergies, which are not included in pro forma adjusted EBITDA, and closing is anticipated in the second half of 2025.
- Phoenix’s operations are bolstered by long-term contracts with a weighted average life of around 6 years, supporting predictable revenue and integration benefits with SunCoke’s operational expertise.
- SunCoke Energy, Inc. filed an 8-K report covering its Virtual Annual Meeting held on May 15, 2025, where significant proxy votes were recorded.
- 72,390,068 shares were represented at the meeting, constituting approximately 85.52% of total outstanding common stock and ensuring a quorum.
- The meeting approved the election of two directors, Arthur F. Anton and Michael W. Lewis, with detailed vote counts reported.
- Shareholders also voted on a non-binding advisory for executive compensation and ratified KPMG LLP as the independent accounting firm for the fiscal year ending December 31, 2025.
- Q1 2025 financial performance: Reported net income of $19.4 million with net income attributable to SXC of $17.3 million (or $0.20 diluted EPS), and Consolidated Adjusted EBITDA of $59.8 million, compared to prior year figures of $21.1 million and $67.9 million respectively.
- Operational update: Extended its Granite City cokemaking contract with U.S. Steel through September 30, 2025, which impacts contract economics and spot coke sales volumes.
- Guidance reaffirmation: Maintained full-year 2025 Consolidated Adjusted EBITDA guidance in the range of $210 million - $225 million.