Warrior Met Coal Announces Fourth Quarter and Full Year 2017 Results
Sales volume increases 42% in the fourth quarter 2017 compared to prior year period to 1.4 million short tons
Production volume increases 52% in the fourth quarter 2017 compared to prior year period to 1.6 million short tons
Company records net income of $97.2 million and Adjusted EBITDA of $86.3 million in the fourth quarter of 2017
BROOKWOOD, AL - February 14, 2018 - Warrior Met Coal, Inc. (NYSE:HCC) (“Warrior” or the “Compa ny”) today announced results for the fourth quarter and full year ended December 31, 2017. Warrior is the leading dedicated U.S. based producer and exporter of high quality metallurgical (“met”) coal for the global steel industry.
Warrior reported fourth quarter 2017 net income of $97.2 million, or $1.83 per diluted share, compared to net income of $34.0 million, or $0.65 per diluted share, in the fourth quarter of 2016. The Company reported Adjusted EBITDA of $86.3 million in the fourth quarter of 2017, compared to Adjusted EBITDA of $51.4 million in the prior year period. The market for high quality premium met coal continued to be strong in the fourth quarter, reflecting resilience in global steel production, as well as the effects of met coal supply disruptions in Australia and supply side reforms in China. The fourth quarter results for Warrior also reflect the successful completion of three planned longwall moves which lowered total production as expected when compared to previous quarters during 2017.
“Warrior’s results in the fourth quarter were even better than expected enabling us to exceed our full year guidance in our key sales and production metrics,” commented Walt Scheller, CEO of Warrior. “The fourth quarter also saw the timely and successful back to back completion of all three longwall moves which will help to strengthen our operational base in 2018.”
Warrior reported full year 2017 net income of $455.0 million and adjusted net income of $467.9 million, excluding non-recurring transaction costs associated with its initial public offering in April 2017, or net income of $8.62 per diluted share and adjusted net income of $8.86 per diluted share. The Company reported Adjusted EBITDA of $517.7 million for the full year of 2017.
The Company produced 1.6 million short tons of met coal in the fourth quarter of 2017, 52% more than the amount produced in the fourth quarter of 2016. For the full year of 2017, the Company produced 6.7 million short tons, which exceeded its guidance and expectations as the Company ramped up its operations toward full capacity of the mines. “Moving one longwall operation is challenging by itself and when combined with the normal difficult geological conditions near the end of a panel, three moves back to back could have been overwhelming. However, our success was the result of good planning, preparation, communication and outstanding work by our employees and we thank them for the significant effort and success,” Mr. Scheller added.
Additional Financial Results
Total revenues were $239.8 million for the fourth quarter of 2017, including $228.8 million in mining revenues, which consisted of met coal sales of 1.4 million short tons at an average net selling price of $168.89 per short ton, net of demurrage and other charges. Sales volume increased 42% over the fourth quarter of 2016, reflecting both strong continued production and strong demand from customers. Warrior capitalized on the strong pricing environment in the quarter by selling its met coal at 101% of the quarterly Australian premium low-volatility ("LV") hard coking coal ("HCC") index average price (the "Australian LV Index"), which replaced the Australian premium low-volatility HCC benchmark (“Australian HCC Benchmark”) starting in the second quarter of 2017. Total revenues for 2017 were $1.2 billion on sales volume of 6.5 million short tons.
Cost of sales for the fourth quarter of 2017 were $136.7 million, or 59.7% of mining revenues, and included mining costs, transportation and royalty costs. Cash cost of sales (free-on-board port) per short ton increased to $100.97 in the fourth quarter
The following information was filed by Warrior Met Coal, Inc. (HCC) on Wednesday, February 14, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.