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Sep 30, 2023
Warrior Met Coal Q3 2023 Earnings Report
Reported a decrease in net income but an increase in sales volumes and production.
Key Takeaways
Warrior Met Coal reported a net income of $85.4 million for Q3 2023, a decrease from $98.4 million in Q3 2022. However, sales volumes increased by 51% to 2.3 million short tons, and production increased by 21% to 2.0 million short tons. The company also reduced debt leverage by $146.1 million.
Sales volumes rose 51% to 2.3 million short tons due to strong demand and improved transportation.
Production increased 21% to 2.0 million short tons due to higher capacity levels at Mine No. 4 and Mine No. 7.
Average net selling price decreased 26% to $184.71 per short ton due to record high steelmaking coal market pricing last year.
Debt leverage was reduced by nearly 50%, or $146.1 million, through tender offers for senior secured notes.
Forward Guidance
The Company has updated its guidance for the full year 2023, with the only updates attributed to mine development costs and interest income, net.
Positive Outlook
- Coal sales between 7.1 and 7.7 million short tons.
- Coal production between 6.8 and 7.4 million short tons.
- Capital expenditures for existing mines between $95 and $105 million.
- Selling, general and administrative expenses between $42 and $48 million.
- Net interest income between $20 and $24 million.
Challenges Ahead
- One planned longwall move in Q4.
- HCC index pricing.
- Exclusion of other non-recurring costs.
- Terms of any new labor contract.
- Inflationary pressures.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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