February 24, 2025 - For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

- Coronado Global Resources Inc (CODQL) achieved a 5% increase in ROM production year-on-year, reaching a total sellable production of 15.3 million tons.

-The company successfully reduced mining costs by approximately $100 million, with a 66% decrease from January to December 2024.

- Coronado's Mammoth Underground and Buchanan expansion projects are set to deliver an additional 2.5 to 3 million tons per annum, offering higher margins and low-cost capital intensity.

- The company maintained a strong balance sheet with a group revenue of $2.5 billion, marking its third-highest in history, and 95% of revenue was generated from met coal sales.

- Coronado is well-positioned to capitalize on future demand growth, particularly in India, with high-quality, long-life assets and a diverse customer base focused on Asia.

Negative Points

The average met coal price fell by 19% year-on-year, impacting revenue despite being the third-highest in history.

Coronado faced substantial operating costs, paying $413 million in corporate taxes, government royalties, and rebates.

The company experienced a decline in metal prices to a three-year low, approximately 20% due to uncertain economic conditions and weak market sentiment from China.

Despite strong performance, Coronado's financial results were impacted by global economic headwinds affecting steel markets.

The company anticipates potential supply shortages of around 150 million tons due to cost curve pressures and operational constraints.

Q & A Highlights

Q: Can you elaborate on the strategic priorities for Coronado in 2025 and beyond?

A: Douglas Thompson, CEO, emphasized that Coronado's strategic priorities include improving productivity, reducing costs, driving performance reliability, and leveraging market dynamics. The company is focused on executing growth projects like the Mammoth Underground and Buchanan expansions, which are expected to significantly increase production and reduce costs. Additionally, Coronado is preparing for the expiration of the Stanwell supply coal agreement, which will enhance cash flow and reduce costs by approximately 10% at a group level.

Q: How did Coronado perform financially in 2024, and what are the expectations for 2025?

A: Douglas Thompson, CEO, reported that Coronado generated a group revenue of $2.5 billion in 2024, marking it as the third highest in the company's history. The company maintained a strong balance sheet with $340 million in cash. For 2025, Coronado is guiding for sellable production between 16.8 and 18 million tons, with mining costs expected to decrease due to higher production and ongoing cost reduction programs.

Q: What are the key growth projects and their expected impact on Coronado's operations?

A: Douglas Thompson, CEO, highlighted the Mammoth Underground and Buchanan expansion projects as key growth drivers. The Mammoth project is expected to add 2.5 to 3 million tons per annum of incremental metallurgical coal, while Buchanan's expansion aims to increase salable production to 7 million tons per year. These projects are designed to offer higher margins and are expandable with low-cost capital intensity.

Q: How is Coronado positioned in the global met coal market, and what are the future market expectations?

A: Douglas Thompson, CEO, stated that Coronado is well-positioned in the global met coal market, with a diverse customer base focused on Asia. The global met coal market demonstrated resilience in 2024, and future projections show promising increases in prices and demand. Coronado's high-quality, long-life assets are expected to capitalize on the growing demand, particularly from India, which is projected to see a significant increase in steel production.

Q: What are the anticipated challenges and opportunities for Coronado in the coming years?

A: Douglas Thompson, CEO, acknowledged potential challenges such as global economic uncertainties and operational constraints. However, he emphasized opportunities arising from the expiration of the Stanwell agreement, which will enhance cash flow and reduce costs. Coronado is also exploring expandability scenarios for its projects and remains open to M&A opportunities to further strengthen its position in the market.

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