SunCoke Energy Q2 Earnings Call Highlights

SunCoke Energy (NYSE:SXC) reported second-quarter 2026 consolidated adjusted EBITDA of $69.6 million, up from $43.6 million a year earlier, as the company benefited from the addition of Phoenix, higher terminal handling volumes and favorable coal-to-coke yields.

Net income attributable to SunCoke was $0.15 per share, an increase of $0.13 per share from the prior-year period. Chief Financial Officer Shantanu Agrawal said the year-over-year improvement was primarily driven by Phoenix’s contribution and stronger terminal volumes.

The company raised its full-year consolidated adjusted EBITDA guidance to a range of $250 million to $265 million, citing expectations for continued operating strength in its domestic coke and industrial services businesses. SunCoke also declared a quarterly dividend of $0.12 per share, payable Sept. 2, 2026, marking its 28th consecutive quarterly dividend.

Domestic Coke Operations Improve

SunCoke’s domestic coke segment generated adjusted EBITDA of $42.5 million during the second quarter, compared with $40.5 million in the same period last year. Coke sales volumes totaled 878,000 tons, down from 943,000 tons a year earlier, reflecting the Haverhill One shutdown.

Agrawal said improved operating conditions supported favorable coal-to-coke yields, more than offsetting the impact of lower sales volumes. The company also resumed power production from the Middletown turbine in May, earlier than anticipated.

SunCoke increased its full-year domestic coke adjusted EBITDA guidance to $172 million to $178 million. In response to an analyst question about expected second-half performance, Agrawal said the company will receive a full-quarter benefit from Middletown turbine generation during both the third and fourth quarters. Guidance also includes insurance recovery proceeds related to the period when the turbine was unavailable.

Chief Executive Officer Katherine Gates said SunCoke is operating at full capacity and is sold out for the full year. The company has contracts in place for Haverhill Two and Granite City coke-making operations, while all spot blast and foundry coke sales have been finalized.

Industrial Services Posts Record EBITDA Since Phoenix Acquisition

Industrial services adjusted EBITDA rose to $34.4 million in the second quarter from $7.7 million a year earlier, representing the segment’s highest adjusted EBITDA since SunCoke acquired Phoenix. Total terminal handling volumes reached 6.7 million tons, including 5.8 million tons of steel customer volumes serviced.

The company raised full-year industrial services adjusted EBITDA guidance to $110 million to $115 million. Gates said the second quarter was “extraordinary” for terminal activity, with several factors contributing to higher volumes across its terminals.

She cited a shift in domestic and international coal pricing, along with supply-chain and energy concerns related to the war in Iran, as factors supporting higher volumes through Gulf terminals. However, Gates said SunCoke expects second-half terminal activity to remain strong rather than repeat the unusually high second-quarter level.

Agrawal said second-half terminal volumes are expected to fall between first- and second-quarter levels, and closer to the first-quarter run rate. He also noted that second-quarter results included seasonal slag sales at Phoenix that are expected to normalize in the third and fourth quarters.

Gates said SunCoke has achieved a substantial portion of the $5 million to $10 million in anticipated Phoenix synergies during 2026 and expects to realize full synergies in 2027. She characterized the approximately $60 million to $61 million annual adjusted EBITDA outlook discussed at the time of the acquisition as a baseline, while noting Phoenix is producing stronger results this year.

Cash Flow, Liquidity and Capital Allocation

SunCoke ended the quarter with $42.7 million in cash and $164.5 million of revolver availability, for total liquidity of $207 million.

Net cash used in operating activities was $27.2 million, which Agrawal said was adversely affected by the timing of roughly $65 million in cash receipts near the end of the quarter. Those receipts were subsequently received in July. The company expects operating cash flow to normalize through the remainder of the year and raised full-year operating cash flow guidance to $240 million to $260 million.

During the quarter, SunCoke used $6.5 million for debt repayment, spent $15.9 million on capital expenditures and paid $10.2 million in dividends. Management said it intends to use free cash flow for debt reduction and shareholder returns, while continuing to assess investment and growth opportunities across its operations.

“We are confident that we’ll be able to deliver full-year consolidated adjusted EBITDA within our revised guidance range of $250 million-$265 million,” Gates said.

About SunCoke Energy (NYSE:SXC)

SunCoke Energy, Inc is a leading independent producer of metallurgical coke and related products for the steel and foundry industries. The company specializes in manufacturing both blast furnace coke and foundry coke, offering high‐quality, low‐sulfur coal products that serve as essential inputs in steelmaking and metal casting processes. In addition to coke production, SunCoke provides comprehensive engineering, maintenance and environmental solutions tailored to the needs of integrated steel mills and foundries.

The company operates a network of coke production facilities across the United States, including plants in Indiana, Ohio, West Virginia and Louisiana.