Q2 2026 Warrior Met Coal Inc Earnings Call Transcript
Key Points
- Record quarterly sales volume of 3.7 million short tons, a 65% increase year-over-year, driven by Blue Creek's contribution.
- Significant margin expansion with adjusted EBITDA up 193% to $157 million and adjusted EBITDA margin improving to 31%.
- Strong free cash flow generation of $103 million in Q2, bringing first-half free cash flow to positive $11 million, marking a key inflection point.
- Cash cost per ton decreased 9% to $93, benefiting from Blue Creek's low-cost structure and the 45X production tax credit.
- Raised full-year sales and production guidance by 0.5 million tons, with Blue Creek sales volume now expected at 5 million tons, 90% already contracted.
- Gross price realization fell to 66% from 80% year-over-year due to higher freight rates, a 21% higher mix of High Vol-A product, and depressed Atlantic Basin prices.
- Average net selling price declined $12 per ton sequentially in Q2, pressured by higher freight rates, demurrage charges, and a shift in sales mix toward lower-priced Atlantic Basin volumes.
- Second-tier index relativities remain depressed, with US East Coast HVA prices down 7% year-over-year, and management expects continued pressure on net selling prices in H2.
- Global steel fundamentals remain weak, with Chinese buying subdued and steel exports pressuring the market, limiting sustained price momentum.
- Inflationary cost pressures on materials and supplies (e.g., steel roof supports, diesel) could add a few dollars per ton in the second half, potentially impacting cost guidance.
Good afternoon. My name is Drew and I will be your conference operator today. At this time, I would like to welcome everyone to the Warrior second-quarter 2026 financial results conference call. (Operator Instructions) This call is being recorded and will be available for replay on the company's website.
I would now like to turn the call over to Brian Chopin. Chief Accounting Officer and Controller. Please go ahead.
Good afternoon and welcome everyone to Warrior's second quarter 2026 earnings conference call.
Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the Private Securities Litigation Reform Act.
Forward-looking statements by their nature address matters that are to different degrees uncertain. These uncertainties, which are described in more detail in
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