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SunCoke Energy, Inc. (SXC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered resilient results despite softer top-line: revenues $486.0M, diluted EPS $0.28, and Adjusted EBITDA $66.1M, with EBITDA up +$3.8M year over year on lower outage costs and stronger logistics volumes .
  • Full-year FY 2024 EPS $1.12 and Adjusted EBITDA $272.8M exceeded the high end of revised guidance; record safety (TRIR 0.50) and a one-time DOL gain aided results .
  • 2025 guidance implies a step-down: Consolidated Adjusted EBITDA $210–$225M, reflecting lower economics at Granite City and weaker spot coke margins at Haverhill; logistics steady but index-benefit removed .
  • Capital allocation steady: dividend maintained at $0.12 per share (declared for Mar 3, 2025) and capex guided lower to ~$65M; liquidity remains strong with ~$540M at year-end .
  • Potential stock catalysts: clarity on Haverhill contract and Granite City extension, spot coke pricing trajectory, FOB NOLA index evolution at CMT, and progress on the Granite City GPI project amid U.S. Steel/Nippon delays .

What Went Well and What Went Wrong

What Went Well

  • Logistics outperformed: Q4 logistics Adjusted EBITDA rose to $11.5M and tons handled increased to 5,262K; FY 2024 logistics Adjusted EBITDA reached $50.4M on higher domestic volumes and API2 benefit .
  • Operational execution: Domestic coke ran at full capacity; lower planned outage costs lifted Q4 coke Adjusted EBITDA to $57.3M versus $55.2M in Q4 2023 .
  • Safety and cash generation: Record TRIR 0.50; FY 2024 operating cash flow $168.8M with steady liquidity (~$540M) and dividend increased to $0.12/share during the year .

What Went Wrong

  • Top-line pressure: Q4 revenues fell to $486.0M (from $520.6M in Q4 2023), primarily on pass-through of lower coal costs; FY revenues declined similarly .
  • Coke unit economics compressed: Domestic coke Adjusted EBITDA/ton trended down ($55.52 in Q4 vs $53.23 in Q4 2023; FY down to $58.27 from $61.25) on lower coal-to-coke yields and anticipated weaker spot margins .
  • 2025 step-down: Guidance embeds lower Granite City economics and absence of the $9.5M one-time DOL gain, driving consolidated Adjusted EBITDA to $210–$225M .

Financial Results

Headline Metrics (YoY and Sequential context across recent quarters)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenues ($USD Millions)$520.6 $470.9 $490.1 $486.0
Net income attributable to SXC ($USD Millions)$13.8 $21.5 $30.7 $23.7
Diluted EPS ($USD)$0.16 $0.25 $0.36 $0.28
Adjusted EBITDA ($USD Millions)$62.3 $63.5 $75.3 $66.1

Unit Economics and KPIs

KPIQ2 2024Q3 2024Q4 2024
Domestic Coke Adjusted EBITDA per ton ($/ton)$59.51 $56.57 $55.52
Domestic Coke Sales Volumes (thousand tons)973 1,027 1,032
Logistics Tons Handled (thousand tons)5,982 5,843 5,262

Segment Breakdown

MetricQ2 2024Q3 2024Q4 2024
Domestic Coke Revenues ($M)$441.6 $459.9 $456.3
Domestic Coke Adjusted EBITDA ($M)$57.9 $58.1 $57.3
Logistics Revenues ($M)$20.2 $21.4 $20.8
Logistics Adjusted EBITDA ($M)$12.2 $13.7 $11.5
Brazil Coke Revenues ($M)$9.1 $8.8 $8.9
Brazil Coke Adjusted EBITDA ($M)$2.5 $2.5 $2.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Adjusted EBITDA ($M)FY 2024$240–$255 $260–$270 Raised
Consolidated Adjusted EBITDA ($M)FY 2025N/A$210–$225 New
Net Income ($M)FY 2025N/A$52–$69 New
Operating Cash Flow ($M)FY 2025N/A$165–$180 New
Total Capex ($M)FY 2025N/A~$65 New
Cash Taxes ($M)FY 2025N/A$17–$21 New
Domestic Coke Adjusted EBITDA ($M)FY 2025N/A$185–$192 New
Logistics Adjusted EBITDA ($M)FY 2025N/A$45–$50 New
Domestic Coke Sales (MM tons)FY 2025N/A~4.0 New
Dividend per share ($)Ongoing$0.10 (pre-Q3) $0.12 (maintained; declared 3/3/25) Raised (Q3) and maintained

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
Spot coke market & steel demandTiming-driven lower blast coke volumes; API2 pressure at CMT Guidance raised; API2 benefit at CMT; domestic coke EBITDA revised lower on yields/weather Tepid steel demand and seaborne coke oversupply compress spot margins at Haverhill Deteriorating spot margins
Granite City contract economicsExtended to June 2025 Extension bridges GPI; reduced tonnage and lower economics Guidance assumes extension through YE 2025 at lower economics Lower economics sustained
Logistics pricing indexAPI2 cited as headwind at times Significant API2 benefit recognized; guidance for Q4 consistent API2 replaced by FOB NOLA at CMT; no index benefit assumed in 2025 Index change; benefit removed
Black lung liabilities—DOL exemption: $36M payment; $9.5M gain; accrual reduced 2025 EBITDA excludes $9.5M one-time gain One-time benefit rolls off
Capex cadence$75–$80M guided $75–$80M maintained; liquidity >$515M 2025 capex ~$65; ~$5M growth for KRT; relatively steady quarterly spend Lower in 2025
GPI project status—Ongoing; Granite City extension supports process Delayed amid U.S. Steel/Nippon litigation; management reiterates strategic merits Delayed; strategic priority intact
Dividend policyIncreased to $0.12 Declared $0.12 (12/2/24) Declared $0.12 (3/3/25); continuation anticipated Maintained

Management Commentary

  • “2024 was another strong year… full-year Adjusted EBITDA exceeding the high-end of our revised guidance range… We made excellent progress growing our logistics business… Additionally, we continued to make progress on our capital allocation goals by increasing the quarterly dividend by 20 percent.” — Katherine Gates, President & CEO .
  • “We expect consolidated adjusted EBITDA to be between $210 million and $225 million in 2025… Domestic Coke adjusted EBITDA is expected to be lower… driven by lower margins at both Granite City and Haverhill.” — Mark Marinko, CFO .
  • “We see 2025 reflecting the broader challenges the steel industry is facing with lower pricing and demand… we continue to reliably produce high-quality coke and are essentially sold out for the full year.” — Katherine Gates .

Q&A Highlights

  • Haverhill exposure and utilization: If not renewed, SunCoke will continue selling foundry and spot coke; management emphasized cyclicality and adaptability, citing past spot sales success (2021–2022) .
  • Domestic coke EBITDA/ton cadence: Expect slight decline in 2H versus 1H given contract expiry timing; operations expected to improve versus 2024 yields .
  • Logistics index shift: CMT index moved from API2 to FOB NOLA at customer request; no 2025 price-adjustment benefit assumed, but upside exists if index moves “in the money” (Platts-published) .
  • Capex breakdown: 2025 capex ~$65M includes ~$5M growth for KRT upgrades; spend expected to be steady across quarters; long-run maintenance capex typically $70–$80M .
  • Capital structure & revolver: No plans for debt buybacks; early discussions underway to address revolver coming current mid-2025; no red flags .
  • M&A exploration: Higher Q4 “transaction costs” included work on potential profitable growth opportunities beyond GPI; disciplined approach, no specifics disclosed .

Estimates Context

  • S&P Global Wall Street consensus for Q4 2024 EPS, revenue, and EBITDA was unavailable at time of analysis due to data access limits; as a result, we cannot characterize beat/miss versus consensus for this quarter. Values would be retrieved from S&P Global when available.
  • Implication: Given Q4 Adjusted EBITDA of $66.1M and diluted EPS of $0.28, estimate revisions may focus on 2025 margin compression (Granite City/Haverhill) and removal of the 2024 one-time gain; logistics volumes steady but index benefit removed .
    Values retrieved from S&P Global would be included when accessible.

Key Takeaways for Investors

  • 2025 reset: Expect consolidated Adjusted EBITDA $210–$225M as Granite City and spot margins compress; position sizing should reflect near-term earnings step-down and potential 2H skew from Haverhill timing .
  • Logistics steady-state: Volume outlook similar to 2024 with KRT contract driving domestic throughput; upside optionality tied to FOB NOLA index moving “in the money” .
  • Coke unit economics: Domestic coke EBITDA/ton trending lower; monitor foundry and spot sales execution and steel demand trajectory for margin stabilization .
  • Balance sheet and cash returns: Strong liquidity (~$540M) and ongoing dividend at $0.12/share support downside protection; capex moderation to ~$65M enhances FCF ($100–$115M guided) .
  • Contract clarity as catalyst: Watch Haverhill renewal outcomes and Granite City extension decision through YE 2025; outcomes may drive multiple and estimate revisions .
  • GPI project optionality: Despite delays tied to U.S. Steel/Nippon, management reiterates strategic merits; any resolution could re-rate medium-term growth narrative .
  • Trading lens: Near term, stock likely sensitive to spot coke pricing prints, index dynamics at CMT, and contract headlines; medium term thesis hinges on logistics stability, FCF durability, and coke margin normalization .