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    SXC
    Earnings call· Jun 2026(Q2 FY26)

    SunCoke Energy Q2 FY26 earnings call SXC

    Jul 30, 2026 Source

    Executive summary

    SunCoke Energy Q2 FY26 — Strong EBITDA and Raised Full-Year Guidance

    SunCoke Energy delivered a robust second quarter, driven by strong performance in its Industrial Services segment and favorable coal-to-coke yields in Domestic Coke. The company raised its full-year adjusted EBITDA and operating cash flow guidance, reflecting confidence in continued operational strength and a balanced capital allocation strategy focused on debt reduction and consistent shareholder returns.

    Highlights

    5

    • Consolidated adjusted EBITDA of $69.6 million, significantly up from $43.6 million in the prior year period.

    • Industrial Services segment delivered its highest adjusted EBITDA since the Phoenix acquisition, reaching $34.4 million.

    • Full-year 2026 consolidated adjusted EBITDA guidance raised to $250 million to $265 million.

    • Quarterly dividend of $0.12 per share declared, marking the 28th consecutive quarterly dividend.

    • Full-year operating cash flow guidance increased to $240 million to $260 million.

    Concerns

    2

    • Coke sales volumes decreased to 878,000 tons in Q2 FY26 from 943,000 tons in the prior year, primarily due to the Haverhill One shutdown.

    • Cash used in operating activities was $27.2 million, negatively impacted by the timing of approximately $65 million in cash receipts at quarter-end.

    Guidance & targets

    5
    CategoryTargetConfidence
    Consolidated Adjusted EBITDA
    $250 million to $265 million
    high materiality
    High
    Domestic Coke Adjusted EBITDA
    $172 million to $178 million
    medium materiality
    High
    Industrial Services Adjusted EBITDA
    $110 million to $115 million
    medium materiality
    High
    Operating Cash Flow
    $240 million to $260 million
    medium materiality
    High
    Quarterly Dividend
    $0.12 per share
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Domestic Coke
    Adjusted EBITDA increased from $40.5 million in the prior year, primarily driven by favorable coal-to-coke yields due to improved operating conditions, partially offset by lower Coke sales volumes due to the Haverhill One shutdown. The Middletown turbine returned to service in May.
    Coke sales volumes: 878,000 tonsPrior year Coke sales volumes: 943,000 tons
    		———$42.5 million Adjusted EBITDA
    Industrial Services
    Adjusted EBITDA increased significantly from $7.7 million in the prior year, primarily driven by the addition of Phoenix results and higher terminal handling volumes.
    Total terminals handling volumes: 6.7 million tonsSteel customer volumes serviced: 5.8 million tonsPrior year Adjusted EBITDA: $7.7 million
    		———$34.4 million Adjusted EBITDA

    Operational metrics

    13
    Net income attributable to Suncorp per share
    $0.15up $0.13 versus prior year period
    Q2 FY26

    Primarily driven by the addition of Phoenix results and higher terminal handling volumes.

    Consolidated Adjusted EBITDA
    $69.6 millioncompared to $43.6 million in prior year period
    Q2 FY26

    Increase primarily driven by Phoenix results, higher terminal handling volumes, and favorable coal-to-coke yields, partially offset by lower Coke sales volumes and higher employee expense accrual.

    Cash balance
    $42.7 million
    Q2 FY26 end

    Part of total liquidity.

    Revolver availability
    $164.5 million
    Q2 FY26 end

    Part of total liquidity.

    Total liquidity
    $207 million
    Q2 FY26 end

    Comprised of cash balance and revolver availability.

    Cash used in operating activities
    $27.2 million
    Q2 FY26

    Negatively impacted by timing of approximately $65 million of cash receipts at quarter end, subsequently received in July.

    Debt pay down
    $6.5 million
    Q2 FY26

    Part of capital allocation strategy.

    Capital expenditure
    $15.9 million
    Q2 FY26

    Spend during the quarter.

    Dividends paid
    $10.2 million
    Q2 FY26

    Paid at a rate of $0.12 per share.

    Phoenix acquisition synergies
    $5 million to $10 millionachieved this year
    FY26

    Synergies realized from the Phoenix acquisition.

    Terminal handling volumes
    5.6 million tons
    Q1 FY26

    Reference point for Q2 volumes.

    Middletown turbine outage impact
    ~$10 million
    Q1 FY26

    Impact of turbine outage and weather on Indiana Harbor and other coal plants.

    Domestic Coke yield
    48.4%below full year guidance of 51-52%
    Q2 FY26

    Expected to improve in H2 with full Middletown turbine benefit and insurance proceeds.

    Industry KPIs

    2
    MetricValueDetails
    Safety—
    Production sales volume by metal and by mine878,000 tonstons

    Deals & partnerships

    1
    PhoenixAcquisition of Phoenix, contributing to Industrial Services segment performance and synergies.

    The Phoenix acquisition was a primary driver for the significant increase in Industrial Services adjusted EBITDA and is expected to contribute full synergies in 2027.

    Risks & headwinds

    3
    Lower Coke sales volumesQ2 FY26

    878,000 tons in Q2 FY26 vs. 943,000 tons in prior year

    Mitigation: Not explicitly stated, but offset by favorable coal-to-coke yields and Middletown turbine return.

    Timing of cash receipts negatively impacting operating cash flowQ2 FY26

    $65 million negative impact on Q2 FY26 operating cash flow of $27.2 million

    Mitigation: Receipts were subsequently received in July; operating cash flow expected to normalize over the remainder of the year.

    Normalization of extraordinary terminal handling volumesH2 FY26

    Q2 FY26 volumes of 6.7 million tons were 'extraordinary'; H2 expected to normalize closer to Q1 FY26 levels of 5.6 million tons.

    Mitigation: Management expects H2 to still be 'strong' but not at the exceptional Q2 levels, reflected in guidance.

    What to watch in Q3 FY26

    5

    Domestic Coke yield

    H2 FY26
    Current48.4% (Q2 FY26)
    Target51-52% (full-year FY26 guidance)

    Why it matters

    Achievement of this yield is critical for meeting the raised full-year Domestic Coke adjusted EBITDA guidance.

    in the domestic code this year, for 10 was roughly 48.4, which is still slightly below your revised higher full year guidance of 51 to 52. Could you help us and walk the drivers to achieve this higher yield up for 10 in the second half of the year?.

    Q&A highlights

    6

    What are the drivers to achieve the higher full-year domestic coke yield guidance of 51-52%, given Q2 was 48.4%?

    The higher yield is expected due to the full benefit of the Middletown turbine's power generation in Q3 and Q4, and the inclusion of insurance recovery proceeds for the turbine's outage in the first half of the year.

    “First, you know, the Middletown turbine came back online late part of May. So we still did not have the full benefit of the Middletown turbine power generation for the full quarter. So you're going to see that in the third and the fourth quarter. quarter, the full turbine power generation from Middletown. And the other piece, which is also included in the second half of the year, is the insurance recovery proceeds, which we lost, not having the turbine during the first half of the year. That is also built into our guidance for the second half.”

    asked by Henry Hurl · answered by Shantanu Agrawal

    2 min read5 chapters

    Detailed Narrative

    01

    Operational Highlights and Segment Performance

    SunCoke Energy reported strong Q2 FY26 results with consolidated adjusted EBITDA of $69.6 million, a significant increase from $43.6 million in the prior year. The Industrial Services segment achieved its highest adjusted EBITDA since the Phoenix acquisition, reaching $34.4 million, driven by higher terminal handling volumes of 6.7 million tons. The Domestic Coke segment also performed well, with adjusted EBITDA of $42.5 million, benefiting from favorable coal-to-coke yields and the Middletown turbine returning to service in May.

    02

    Financial Strength and Capital Allocation

    The company ended Q2 with ample liquidity of $207 million, comprising a cash balance of $42.7 million and revolver availability of $164.5 million. SunCoke paid down $6.5 million in debt and spent $15.9 million on CapEx during the quarter. Management reiterated its commitment to a balanced capital allocation strategy, prioritizing debt reduction and returning capital to shareholders through a consistent quarterly dividend of $0.12 per share, marking the 28th consecutive payment.

    03

    Guidance Revision and Outlook

    SunCoke raised its full-year 2026 consolidated adjusted EBITDA guidance to $250 million to $265 million, reflecting confidence in continued strong operating performance across both business segments. Full-year guidance for Domestic Coke adjusted EBITDA was increased to $172 million to $178 million, and for Industrial Services adjusted EBITDA to $110 million to $115 million. The company also increased its full-year operating cash flow guidance to $240 million to $260 million.

    04

    Terminal Volumes and Market Dynamics

    Terminal handling volumes were described as "extraordinary" in Q2, driven by a shift in coal pricing dynamics and supply chain concerns related to geopolitical events. While Q2 saw 6.7 million tons, Q1 was 5.6 million tons. Management expects terminal volumes to normalize in the second half to "normal strong results," closer to Q1 levels, rather than the exceptional Q2 performance.

    05

    Phoenix Integration and Synergies

    The Phoenix acquisition continues to contribute positively, with the Industrial Services segment delivering strong results. SunCoke has already achieved the previously targeted $5 million to $10 million in synergies for the current year, with full synergies expected in 2027. The company attributes Phoenix's strong performance to operational discipline and robust mill performance from its customers.

    AI-generated summary of the company’s earnings call. Not investment advice.