Suncoke Energy ((SXC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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SunCoke Energy’s recent earnings call painted a mixed picture for the company, highlighting both progress and challenges. While there was a sequential improvement in adjusted EBITDA and the completion of the Phoenix Global acquisition, the call also revealed significant hurdles, including a decline in net income, decreased adjusted EBITDA compared to the previous year, and financial impacts from a customer contract breach. The company’s guidance was revised downwards, reflecting these challenges, and there was a noted impact on free cash flow.
Sequential Improvement in Adjusted EBITDA
SunCoke Energy reported a consolidated adjusted EBITDA of $59.1 million for Q3 2025, marking a sequential improvement over the second quarter. This improvement, however, still fell short when compared to the previous year’s performance, indicating ongoing challenges in the company’s financial landscape.
Phoenix Global Acquisition
The company completed its acquisition of Phoenix Global on August 1, 2025. This strategic move is expected to yield synergies starting in 2026, potentially bolstering SunCoke’s operational capabilities and financial performance in the coming years.
Extension of U.S. Steel Agreement
SunCoke successfully extended its coke-making agreement with U.S. Steel at Granite City through the end of 2025. This extension is a positive development, ensuring continued business and revenue from a key partner.
Dividend Declaration
In a show of financial stability, SunCoke declared a quarterly dividend of $0.12 per share, marking the 25th consecutive quarter of dividend declaration. This consistent dividend policy underscores the company’s commitment to returning value to its shareholders.
Decline in Net Income
The earnings call revealed a decline in net income, with Q3 2025 net income attributable to SunCoke at $0.26 per share, down $0.10 from the prior year period. This decline highlights some of the financial pressures the company is currently facing.
Decreased Adjusted EBITDA
SunCoke’s consolidated adjusted EBITDA for Q3 2025 was $59.1 million, a decrease from $75.3 million in the prior year period. This decline reflects the broader challenges the company is navigating in its operational environment.
Customer Contract Breach
A significant issue discussed was the deferral of the sale of approximately 200,000 coke tons due to a breach of contract by a customer, Algoma. This breach has impacted the company’s guidance and financial outlook.
Impact on Free Cash Flow
The breach of contract by Algoma is expected to have a $70 million unfavorable impact on SunCoke’s free cash flow for the full year. This financial strain underscores the importance of resolving contractual issues promptly.
Forward-Looking Guidance
SunCoke Energy revised its consolidated adjusted EBITDA guidance to a range of $220 million to $225 million, factoring in the impact of the deferral of coke sales due to the customer contract breach. The company remains optimistic about future improvements, driven by the full-year integration of Phoenix Global and potential market recovery in its logistics operations. SunCoke’s strong liquidity position, with $206 million in cash and revolver availability, provides a buffer as it navigates these challenges.
In summary, SunCoke Energy’s earnings call reflected a cautious optimism, with progress in certain areas like the Phoenix Global acquisition and sequential EBITDA improvement, but also highlighted significant challenges such as decreased net income and a customer contract breach impacting financial performance. The revised guidance and strong liquidity position suggest a strategic focus on navigating current challenges while positioning for future growth.