Warrior Met Coal’s Earnings Call: Strong Growth Amid Market Challenges

Warrior Met Coal ((HCC)) has held its Q3 earnings call. Read on for the main highlights of the call.

Warrior Met Coal’s recent earnings call painted a picture of strong operational achievements and financial performance, despite facing challenges from weak market conditions and additional supply pressures. The company expressed optimism about its long-term growth strategy, underscoring its commitment to driving shareholder value.

Early Start of Blue Creek Longwall Operations

Warrior Met Coal announced that the Blue Creek longwall operations commenced eight months ahead of schedule. This early start is a testament to the company’s exceptional execution capabilities and its dedication to enhancing shareholder value.

Increased Production and Sales Volume

The company reported a 10% increase in production volume for 2025, with the Blue Creek mine expected to produce 1.8 million short tons of high-vol steelmaking coal. This marks an 80% increase over initial guidance, highlighting Warrior’s robust operational performance.

Successful Federal Coal Lease Acquisition

Warrior successfully acquired a federal coal lease for 58 million short tons of high-quality steelmaking coal reserves. This acquisition is set to enhance the company’s long-term value and extend the life of its core mining operations.

Record Quarterly Sales Volume

The company achieved a record high quarterly sales volume of 2.4 million short tons, representing a 27% increase compared to the same quarter last year. This achievement underscores Warrior’s strong market presence and operational efficiency.

Strong Financial Position

Warrior’s adjusted EBITDA increased by 32% compared to the previous quarter, driven by higher sales volumes and improved net selling prices. This reflects the company’s solid financial footing amidst challenging market conditions.

Weak Steelmaking Coal Market Conditions

Despite its operational successes, Warrior Met Coal is navigating ongoing weak market conditions. Increased Chinese steel exports, subdued global demand, and an oversupplied seaborne steelmaking coal market continue to pose challenges.

Decreased Average Net Selling Price

The average net selling price dropped to $136 per short ton from $172 in the third quarter of last year, marking a 21% decrease. This decline reflects the current market pressures Warrior is facing.

Lower Gross Price Realization

Warrior achieved a gross price realization of 83% in the third quarter, which is below the targeted range of 85% to 90%. This shortfall highlights the pricing challenges in the current market environment.

Pressure from Additional Supply

The company anticipates additional supply coming online, which could keep pricing weak and range-bound. This potential increase in supply is a key concern for Warrior as it looks to maintain its market position.

Guidance and Forward-Looking Statements

Warrior Met Coal provided updated guidance for the fiscal year, with a 10% increase in production volume guidance for 2025, primarily due to the early start of the Blue Creek longwall operations. The company plans to focus on ramping up longwall production and optimizing infrastructure performance while remaining cautious about ongoing market challenges and potential impacts on pricing.

In summary, Warrior Met Coal’s earnings call highlighted strong operational achievements and financial performance, despite facing market challenges. The company’s early start of Blue Creek operations and record sales volumes underscore its commitment to growth and shareholder value. However, ongoing weak market conditions and additional supply pressures remain key concerns moving forward.