May 8, 2020 - SunCoke Energy, Inc. (NYSE: SXC) today reported results for the first quarter 2020 and provided updates on the Company COVID-19 response.
"These are unprecedented times as the COVID-19 pandemic has affected every aspect of our society. SunCoke has taken effective measures to safeguard the health and safety of our workforce," said Mike Rippey, President and Chief Executive Officer of SunCoke Energy, Inc. "As the pandemic unfolded, our internal COVID-19 task force took proactive steps implementing policies and procedures to protect our workforce and contractors which are consistent with guidelines laid out by the CDC, OSHA and local health and governmental authorities."
Rippey continued, "While COVID-19 had limited impact on SunCoke in the first quarter, we recognize the challenging economic environment that exists today. Our customers have dramatically reduced blast furnace output resulting in lower demand for coke. We are currently exploring contract restructuring alternatives with our customers to address short-term market challenges. We value the strong relationships we have with our customers and look to flexibly work with them to navigate through the crisis. While our operations are performing well as evident from our first quarter results, we have made the decision to withdraw our 2020 guidance to reflect the potential for near-term supply relief for our customers. Going forward, we will continue to monitor the rapidly evolving situation and stand ready to take any necessary and appropriate action as the need arises."
First Quarter Consolidated Results
Revenues and Adjusted EBITDA in the first quarter 2020 decreased $8.6 million and $5.2 million, respectively, compared to the prior year period, primarily reflecting lower volumes in the Logistics segment. These decreases were partly offset by higher results in our Domestic Coke segment, driven by the improved performance at our Indiana Harbor cokemaking facility.
Net income attributable to SXC decreased $4.9 million from the prior year period, driven by the operating results discussed above. Net income attributable to SXC also reflects higher income tax expense, net driven by the revaluation of certain deferred tax assets due to lower apportioned state tax rates. This increase in expense was mostly offset by a $2.9 million gain recognized in connection with the repurchase of $12.0 million of our 7.5 percent senior notes due 2025 and lower depreciation expense as compared to the same prior year period.
First Quarter Segment Results
Domestic Coke consists of cokemaking facilities and heat recovery operations at our Jewell, Indiana Harbor, Haverhill, Granite City and Middletown plants.
Revenues increased $5.9 million primarily due to higher volumes, which increased revenues $21.9 million, driven by the performance of the rebuilt ovens at our Indiana Harbor facility. This increase was mostly offset by the pass through of lower coal costs.
Adjusted EBITDA increased $4.9 million due to an increase in sales volumes described above, which increased Adjusted EBITDA $6.3 million. This increase was partially offset by lower coal cost recovery at our Jewell cokemaking facility during the current period.
Logistics consists of the handling and mixing services of coal and other aggregates at our Convent Marine Terminal ("CMT"), Lake Terminal, Kanawha River Terminals ("KRT") and Dismal River Terminal ("DRT").
Revenues and Adjusted EBITDA decreased by $13.3 million and $9.4 million, respectively, driven by lower throughput volumes as well as lower prices, primarily at the CMT facility. Lower demand and lower prices continued to impact coal export volumes in the first quarter.
Brazil Coke consists of a cokemaking facility in Vitória, Brazil, which we operate for an affiliate of ArcelorMittal.
Revenues and Adjusted EBITDA were $8.5 million and $4.1 million, respectively, during the first quarter 2020, which was slightly lower than revenues and Adjusted EBITDA of $9.7 million and $4.5 million, respectively, during the first quarter 2019, driven by lower sales volumes.
Corporate and Other
Corporate and Other
Corporate and other expenses, which includes activity from our legacy coal mining business, was $8.7 million during the first quarter 2020, reasonably consistent with expenses of $8.4 million during first quarter 2019.