What were the main drivers for the significant quarter-over-quarter increase in terminal handling volumes?

The increase was driven by a shift in the domestic versus international coal price mismatch, coupled with supply chain and energy concerns related to the war in Iran, which pushed prices and volumes higher. “we see really a shift in the end of last year and even the beginning of this year. We saw that mismatch where you had higher domestic price. for coal versus internationally, that has certainly shifted. I think that there's supply chain concern and energy concern with respect to the war in Iran that's probably driving some of these prices higher. When the prices go higher, we see that higher volume come through.”

Does the expectation for strong terminal performance in the second half mean further growth or maintaining Q2 levels?

The second half is expected to be strong but not "extraordinary" like Q2, with volumes normalizing closer to Q1 levels, which is reflected in the full-year industrial services guidance. “So we see the second half as being strong, but I would refer to it as being strong as opposed to extraordinary. So, you know, the second quarter really several things converged across all of our terminals to give us those really high volumes that we're very, very pleased with. So we feel very good about the second half, but I would expect those to normalize to what I would consider to be our normal kind of strong results in the second half.”

How to reconcile the implied average $26 million per quarter in Industrial Services adjusted EBITDA for H2, given the raised full-year guidance, and confirm volume expectations?

Q2 terminal volumes were exceptional (6.6 million tons vs. Q1's 5.6 million tons), and the H2 run rate is expected to be closer to Q1 levels. Q2 also benefited from extraordinary, seasonal slag sales on the Phoenix side. “I think one thing in what happened in Q2, Catherine mentioned, right, we saw a significant amount of volumes come through in the terminals this quarter, right? And if you look at our Q1 was pretty strong as well in the terminals with the 5.6 million volumes. you know, kind of volumes and we did 6.6 million volume this quarter. So I would say the run rate for the second half is somewhere in the middle of that, you know, more closer to Q1, I would say. And then the other piece which really, really impacted and helped us in Q2 was some extraordinary kind of, you know, slack. sales that we did on the Phoenix side of the business, which helped drive the number in Q2.”

SXC

SunCoke Energy (SXC) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Materials· Jul 30, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Consolidated Adjusted EBITDA	$250 million to $265 million high materiality	FY26	High
Domestic Coke Adjusted EBITDA	$172 million to $178 million medium materiality	FY26	High
Industrial Services Adjusted EBITDA	$110 million to $115 million medium materiality	FY26	High
Operating Cash Flow	$240 million to $260 million medium materiality	FY26	High
Quarterly Dividend	$0.12 per share medium materiality	Q3 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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

Deals & partnerships

Phoenix Acquisition 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

Lower Coke sales volumes Q2 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 flow Q2 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 volumes H2 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

Domestic Coke yield

H2 FY26

Current 48.4% (Q2 FY26)

Target 51-52% (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?.

Find out whether SXC delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.