Warrior Met Coal, Inc. Reports Fourth Quarter and Full-Year 2024 Financial Results
Warrior Met Coal, Inc., a leading U.S.-based producer and exporter of high-quality steelmaking coal, has released its financial results for the fourth quarter and full year of 2024. Despite challenging market conditions, the company continued to demonstrate resilience, focusing on operational excellence and strategic investments. The year was marked by increased production and sales volumes, key developments in the Blue Creek growth project, and strong cash flow generation. However, Warrior’s financial performance was impacted by declining steelmaking coal prices and challenging global market dynamics.
Financial Performance Overview
In the fourth quarter of 2024, Warrior reported net income of $1.1 million, translating to earnings of $0.02 per diluted share. This represents a substantial decline compared to net income of $128.9 million, or $2.47 per diluted share, in the fourth quarter of 2023. Adjusted net income per share was $0.15 per diluted share, compared to $2.49 per diluted share in the same period of the prior year. The company reported Adjusted EBITDA of $53.2 million for the fourth quarter, significantly lower than the $163.7 million achieved in the fourth quarter of 2023.
For the full year, Warrior posted a net income of $250.6 million and adjusted net income of $257.7 million, or $4.79 and $4.92 per diluted share, respectively. This compares to net income of $478.6 million and adjusted net income of $498.9 million in 2023, equating to $9.20 and $9.59 per diluted share, respectively. Adjusted EBITDA for the full year stood at $447.9 million, a decline from $698.9 million in 2023.
Key Operational Highlights
- Increased Production and Sales Volumes
- Warrior recorded a 6% increase in sales volumes and an 8% increase in production volumes for the full year.
- These production levels were the highest since 2019.
- Mine 4 set a record high annual production of 2.8 million short tons.
- Strong Cash Flow Generation and Capital Investments
- The company generated $367.4 million in cash from operating activities in 2024.
- Capital expenditures and mine development spending reached $488.3 million, the second-highest annual amount in the company’s history.
- Blue Creek Growth Project Progress
- Warrior began production at the Blue Creek mine, an important milestone in the company’s long-term growth strategy.
- Two additional continuous miner units were introduced in the fourth quarter, totaling three units developing the first longwall panel.
- The mine produced 209 thousand short tons in 2024.
- Key infrastructure developments, including clean coal storage silos at the rail loadout, the dry slurry processing system, and the preparation plant, made significant progress.
- The Blue Creek preparation plant is expected to be completed by mid-2025, with longwall startup anticipated no later than the second quarter of 2026.
- Warrior invested $104.1 million in Blue Creek’s development in Q4, bringing total spending on the project to $716.5 million to date.
Market Challenges and Strategic Outlook
CEO Walt Scheller acknowledged that despite strong operational performance, market conditions proved challenging in 2024. High-quality steelmaking coal prices declined to their lowest levels since 2021, driven by excess Chinese steel exports, weakened demand, and ample global supply. However, he emphasized that the company successfully met or exceeded all guidance targets, achieved significant production milestones, and maintained a disciplined capital allocation strategy.
Looking ahead, Warrior remains committed to the development of Blue Creek. The company maintains its projected capital expenditure estimate for the project at $995 million to $1.075 billion. Key longwall shields for Blue Creek have begun arriving, and the company expects all shields to be on site within the first half of 2025. Additionally, major preparation plant equipment is on-site and ready for installation.
Scheller expressed confidence that Blue Creek will be a pivotal growth driver once global steel prices rebound. The project is expected to add 4.8 million short tons of High Vol A production annually, strengthening Warrior’s competitive position, enhancing profitability, and increasing cash flow generation.
Operating Results and Sales Performance
- Sales and Production
- Q4 2024 sales volumes reached 1.9 million short tons, marking a 23% increase compared to 1.5 million short tons in Q4 2023.
- Full-year 2024 sales volumes were 8.0 million short tons, near the high end of the company’s guidance range.
- Production for Q4 2024 was 2.1 million short tons, up from 2.0 million short tons in Q4 2023.
- Full-year 2024 production was 8.2 million short tons, representing an 8% increase from 2023 levels.
- Inventory increased to 1.1 million short tons at the end of 2024, partly due to new production from Blue Creek.
- Revenue and Pricing Trends
- Q4 2024 total revenues were $297.5 million, compared to $363.8 million in Q4 2023.
- The average net selling price per short ton decreased from $234.56 in Q4 2023 to $154.54 in Q4 2024, reflecting a 34% decline in pricing.
- For the full year, total revenues reached $1.5 billion, representing a 9% decrease from 2023 levels, primarily due to lower coal prices.
- Warrior’s average gross selling price realization was 86% of the Platts Premium Low Vol FOB Australian index price in Q4 and 89% for the full year.
Cost Structure and Financial Metrics
- Cost of Sales
- Q4 2024 cost of sales was $228.8 million, up from $186.8 million in Q4 2023.
- Cash cost of sales (free-on-board port) per short ton decreased slightly to $119.55 from $120.69.
- Full-year 2024 cash cost of sales per short ton was $125.29, aligning with Warrior’s guidance.
- Operating Expenses
- Selling, general, and administrative expenses were $17.6 million in Q4 2024, compared to $13.1 million in Q4 2023, primarily due to higher employee-related costs.
- Full-year expenses were $63.1 million, within the company’s projected range.
- Depreciation and Interest Income
- Q4 2024 depreciation and depletion expenses rose to $39.2 million due to new Blue Creek assets.
- Warrior reported net interest income of $6.2 million in Q4 2024, compared to $7.8 million in Q4 2023.
- Full-year interest income of $33.0 million exceeded expectations, while interest expenses of $4.3 million were within guidance.
Cash Flow and Liquidity Position
- Q4 2024 cash flow from operations was $54.2 million, compared to $245.1 million in Q4 2023.
- Capital expenditures for Q4 2024 were $142.2 million, with $104.1 million allocated to Blue Creek development.
- Total free cash flow for Q4 2024 was negative $88.0 million due to increased investments in mine expansion.
