Rising LeverageDebt-to-equity increased materially in 2025, reducing financial flexibility and increasing interest and refinancing risk. Higher leverage constrains capital allocation, limits ability to absorb cyclical earnings shocks, and makes progress dependent on sustained free cash flow and successful execution of the deleveraging plan.
Profitability DeteriorationSharp revenue decline and margin compression pushed SunCoke to a net loss in 2025, reflecting weaker coke economics and one-time impairments. Reduced profitability undermines retained earnings, slows deleveraging, and increases sensitivity to coal, transport and contract mix dynamics over the medium term.
Customer/contract Risk (Algoma Breach)Significant volume loss from Algoma’s contract breach highlights concentration and counterparty risk in coke supply. Ongoing litigation creates revenue and working-capital uncertainty; absent a guaranteed recovery, contract interruptions can persistently depress volumes, cash flow and plant utilization.