On August 1, 2024, Warrior Met Coal Inc (HCC, Financial) released its 8-K filing for the second quarter of 2024. Warrior Met Coal Inc is a U.S.-based company that produces and exports metallurgical coal, operating underground mines in Alabama. The company primarily sells to steel manufacturers in Europe, Asia, and South America.
Performance Overview
Warrior Met Coal Inc reported a net income of $70.7 million, or $1.35 per diluted share, for Q2 2024, down from $82.1 million, or $1.58 per diluted share, in Q2 2023. The company generated Adjusted EBITDA of $115.9 million, compared to $130.0 million in the same period last year. These figures fell short of analyst estimates, which projected earnings per share of $1.62 and revenue of $401.38 million.
Key Financial Achievements
Despite weaker global market demand, Warrior Met Coal Inc achieved an 18% increase in sales volumes and a 13% increase in production volumes, marking the largest quarterly production in over three years. The company invested $84.1 million in the Blue Creek growth project and $25.8 million in sustaining capital expenditures, funded through $147.0 million of cash flows from operations.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenues | $396.5 million | $379.7 million |
| Cost of Sales | $261.3 million | $230.5 million |
| Net Income | $70.7 million | $82.1 million |
| Adjusted EBITDA | $115.9 million | $130.0 million |
Balance Sheet and Cash Flow
Warrior Met Coal Inc reported cash flows of $147.0 million from operating activities in Q2 2024, compared to $124.5 million in Q2 2023. Capital expenditures and mine development costs were $121.6 million, primarily reflecting the continued development of the Blue Creek growth project. Free cash flows were $25.4 million, compared to negative free cash flows of $22.8 million in Q2 2023. The company’s total liquidity as of June 30, 2024, was $816.4 million.
Challenges and Outlook
The company faced challenges such as weaker global market demand and increased transportation costs due to the failure of a lock and dam system on the Tombigbee River, which was repaired in late May. Despite these challenges, Warrior Met Coal Inc re-affirmed its outlook for 2024, with a non-material change to interest expense.
"Our ability to deliver a very strong second quarter performance despite a soft global market reflects our continued success in maximizing sales and production volumes and generating significant cash flow from operations," commented Walt Scheller, CEO of Warrior.
Conclusion
While Warrior Met Coal Inc faced several challenges in Q2 2024, the company managed to increase its sales and production volumes significantly. However, the financial results fell short of analyst estimates, highlighting the impact of weaker global market demand and increased costs. Investors will be keen to see how the company navigates these challenges in the coming quarters.
Explore the complete 8-K earnings release (here) from Warrior Met Coal Inc for further details.
