Total net income fell to $2.1 million from $16.9 million for the previous corresponding period, while revenues dipped 5.7% to $453.9 million due to the pass-through of lower coal prices in SunCoke’s cokemaking business and the decline in average coal sales price.
SunCoke chief executive officer Fritz Henderson said factors that negatively impacted net income included the write-down of unamortized debt issuance costs and other financing costs, unfavorable tax items and accelerated depreciation at its Indiana Harbor facility due to refurbishment and the attribution of income to public unit holders of SunCoke Energy Partners.
“We achieved several key strategic milestones in the first quarter with the completion of the initial public offering of SunCoke Energy Partners and closing on the VISA SunCoke joint venture in India,” he said.
“These key milestones lay a foundation for growth domestically and overseas.
"As expected, our adjusted earnings before interest, tax, depreciation and amortization was down in the quarter due to the significant decline in metallurgical coal prices and operating challenges at Indiana Harbor, where a major plant refurbishment is underway.
“These challenges were partly offset by strong performance at Middletown and coal mining cost reductions.”
Total coal mining revenues (including sales to affiliates) declined due to a reduction in average sales price of approximately $50 per ton.
Segment revenues (excluding sales to affiliates) were down due to lower average sale price and lower sales volumes.
Adjusted EBITDA for the coal mining segment was unfavorably impacted by the decline in coal sales price but was partly offset by approximately $23 per ton in lower cash production costs as a result of its coal action plan initiatives, including idling mines, reducing staff, upgrading equipment and installing a new cyclone system in its coal prep plant.
Beginning in the first quarter 2013, the company combined its Jewell Coke and other domestic coke segments into one segment called “Domestic Coke” due to the similarities of operations and contracts between the two segments.
Looking ahead Henderson expects SunCoke to sustain its level of performance in the cokemaking business, make further progress in the refurbishment of Indiana Harbor and continue taking aggressive action in our coal mining business to enhance productivity and reduce costs.
The company reaffirmed its 2013 consolidated adjusted EBITDA guidance of
$205-230 million.
