November 1, 2024 - Warrior Met Coal (NYSE:HCC) is a U.S. metallurgical ("met") coal mining company with operations in Alabama, that exports most of its coal production. The relatively low operating cost and export focus means Warrior has a decent operating margin, even during periods of weaker coal prices.

The company released its Q3 2024 result and hosted a conference call on the 30^th of November, which this article will focus on. I have covered Warrior a few times earlier this year and those articles can be found here.

The stock price performance of Warrior has roughly been flat in 2024, and the stock has recently held up much better than a peer like Alpha Metallurgical Resources (AMR) for example. That is at least partly due to the superior margin of Warrior, but likely also because the growth project Blue Creek is approaching longwall mining in the first half of 2026.

Q3 2024 Result

Warrior reported an adjusted EBITDA of $78M in Q3, which is down materially compared to the prior quarter, and this is the weakest adjusted EBITDA in three years. Adjusted net income was $42M, which is decent when we consider how weak the coking coal market has been lately. The EPS was $0.80 in Q3, beating the consensus estimate of $0.63 slightly.

The company sold 1.9 million tons of coal in Q3, somewhat below the prior two quarters in 2024, but Warrior is on track to end up around the mid-point of the annual sales guidance range of 7.4-8.2 million tons. The sales price was $172/t, the cash cost was $123/t, which led to a cash margin of $48/t in the most recent quarter. Even if the figures aren’t overly impressive compared to recent history, this is still a respectable margin in a challenging market, which few peers will match.

Warrior pays a small quarterly dividend of $0.08, where the next dividend payment will be on the 12th of November. The regular quarterly dividend equates to an annual dividend yield of 0.5%. The company has also paid special dividends on occasions, which we can likely expect over the coming year if coking coal prices firm up and Blue Creek gets closer to longwall mining.

Blue Creek

The two producing mines in Alabama have an annual production capacity of around