• Sales Volume: Increased by 23% to 1.9 million short tons in Q4 2024 compared to 1.5 million short tons in Q4 2023.
• Production Volume: Increased by 7% to 2.1 million short tons in Q4 2024 compared to 2 million short tons in Q4 2023.
• Cash from Operations: Over $367 million generated in 2024.
• Net Income: $1.1 million or $0.02 per diluted share in Q4 2024, compared to $129 million or $2.47 per diluted share in Q4 2023.
• Adjusted EBITDA: $53 million in Q4 2024, down from $164 million in Q4 2023.
• Adjusted EBITDA Margin: 18% in Q4 2024, compared to 45% in Q4 2023.
• Total Revenues: $297 million in Q4 2024, down from $364 million in Q4 2023.
• Average Net Selling Price: $155 per short ton in Q4 2024, compared to $235 per short ton in Q4 2023.
• Cash Cost of Sales: $226 million or 77% of mining revenues in Q4 2024, compared to $185 million or 51% in Q4 2023.
• Free Cash Flow: Negative $88 million in Q4 2024.
• Capital Expenditures: $142 million in Q4 2024, with $116 million related to Blue Creek.
• Blue Creek Project Investment: Total project investment to date is $717 million.

• Warning! GuruFocus has detected 5 Warning Signs with DVA.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Warrior Met Coal Inc (NYSE:HCC) achieved a 23% increase in sales volumes and a 7% increase in production volumes compared to the previous year's fourth quarter.
• The company generated over $367 million in cash from operations, which was used to further develop the Blue Creek project and return $43 million to stockholders via dividends.
• The Blue Creek growth project is progressing on schedule and on budget, with significant infrastructure developments completed and production expected to ramp up in 2025.
• Warrior Met Coal Inc (NYSE:HCC) maintained strong safety results and met or exceeded all guidance targets for 2024.
• The company has a strong balance sheet and sufficient liquidity to complete the Blue Creek project without slowing down or suspending it, even in weak market conditions.

Negative Points

• Warrior Met Coal Inc (NYSE:HCC) faced weak market conditions with steelmaking coal prices reaching their lowest levels since 2021, impacting profitability.
• The company reported a significant decrease in net income for the fourth quarter of 2024 compared to the same period in 2023, primarily due to lower average net selling prices.
• Adjusted EBITDA margin dropped from 45% in the fourth quarter of 2023 to 18% in the fourth quarter of 2024.
• The company anticipates continued weak market conditions and downward pressure on steelmaking coal prices due to global economic factors.
• Warrior Met Coal Inc (NYSE:HCC) has not yet reached a new labor contract with the United Mine Workers, which remains an ongoing negotiation.

Q & A Highlights

Q: Can you break out the contribution from Blue Creek versus Mine 4 and Mine 7, and how should we think about the cadence of sales with the prep plant coming online in the second half? A: (Walter Scheller, CEO) We project about 1 million tons from Blue Creek this year. The prep plant will come online in the second quarter, and we expect to start selling coal in the third quarter. Mine 4 will likely produce over 2 million tons, with Blue Creek contributing around 1 million tons.

Q: What is driving the meaningful reductions in cash cost guidance, and how much is attributed to greater fixed cost absorption versus pricing and sales-sensitive cost expectations? A: (Dale Boyles, CFO) The lower end of our guidance is primarily due to lower met coal prices, affecting transportation and royalties. We've assumed a low met coal price in our cost assumptions for this year.

Q: How should we think about your sales by geography, particularly any tons that may have otherwise gone to China? A: (Walter Scheller, CEO) Tons that would have gone to China will likely still flow into Asian markets, so there won't be a significant differential in transportation costs.

Q: Given the weak environment and Blue Creek volume starting in the second half, will shipments be more second-half tilted? A: (Dale Boyles, CFO) Yes, the majority of the 1 million tons from Blue Creek will be shipped in the second half.

Q: What are your price realizations, especially with high-vol A price from Blue Creek? Does the 85% to 90% realization still stand? A: (Dale Boyles, CFO) Yes, it does for now. As volumes increase in the future, this may change, but currently, we expect realizations to be on the lower end of that range.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.