Warrior Met Coal Announces Second Quarter 2018 Results
Raises Full Year Guidance
BROOKWOOD, AL — August 1, 2018 - Warrior Met Coal, Inc. (NYSE:HCC) (“Warrior” or the “Company”) today announced results for the second quarter ended June 30, 2018. Warrior is the leading dedicated U.S.-based producer and exporter of high quality metallurgical (“met”) coal for the global steel industry.
Warrior reported second quarter 2018 net income of $91.3 million, or $1.72 per diluted share, compared to second quarter 2017 net income of $129.9 million, or $2.46 per diluted share. Excluding one-time transaction and other expenses and incremental non-cash stock compensation expense, adjusted earnings per share for the second quarter 2018 were $1.81 per diluted share. The Company reported Adjusted EBITDA of $128.8 million for the second quarter 2018 compared to Adjusted EBITDA of $188.5 million for the second quarter of 2017.
Year-to-date, Warrior reported net income of $270.0 million, or $5.10 per diluted share, compared to net income of $238.2 million, or $4.52 per diluted share, in the same period of 2017. Excluding one-time transaction and other expenses and incremental non-cash stock compensation expense, adjusted earnings per share year-to-date were $5.24 per diluted share compared to the same period in 2017 of $4.73 per diluted share. Year-to-date Adjusted EBITDA was $345.3 million compared to $323.9 million in the same period of 2017.
“The market for high quality premium met coal continued to be robust in the second quarter, though moderated somewhat from the exceptional strength we have seen over the past year,” commented Walt Scheller, CEO of Warrior. “Given the strength of our financial and operating results in the first and second quarters, performance at our mines, ongoing global GDP growth, and strong demand for steel production, we are raising our guidance for the balance of the year. Warrior’s performance clearly demonstrates the unique value of our highly focused business strategy as a premium 'pure-play' met coal producer.”
The Company produced 1.9 million short tons of met coal in the second quarter of 2018, roughly equivalent to the amount produced in the second quarter of 2017. The actual production volume was better than expected as the Company entered the second quarter with a scheduled shut down for a week of maintenance at one of its mines. The Company continues to make good progress toward its nameplate annual capacity of eight million short tons. Halfway through the year, the Company produced and sold 4.0 million short tons of met coal without any longwall moves.
Total revenues were $322.6 million for the second quarter of 2018, including $315.0 million in mining revenues, which consisted of met coal sales of 1.9 million short tons at an average net selling price of $167 per short ton, net of demurrage and other charges. Average net selling price declined 7.8% compared to the second quarter of 2017, reflecting the higher met coal price environment last year due to Cyclone Debbie in Australia. Warrior capitalized on the strong pricing environment in the quarter by achieving a gross price realization of 100%. Since January 2018, the Company’s gross price realization has represented a volume weighted-average calculation of the Company's daily realized price per ton based on gross sales, which excludes demurrage and other charges, as a percentage of the Platts Premium Low Volatility (“LV”) Free-On-Board (“FOB”) Australia Index price (the “Platts Index”).
Cost of sales for the second quarter of 2018 were $178.5 million, or 56.7% of mining revenues, and included mining costs, transportation and royalty costs. Mining costs were higher in the second quarter of 2018 than in the same period last year primarily due to the continued ramp up of mining activities and incremental costs associated with the scheduled week of maintenance that was previously announced.
The following information was filed by Warrior Met Coal, Inc. (HCC) on Wednesday, August 1, 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.