CONSOL Energy Inc (NYSE:). (NYSE: CEIX) reported a robust first quarter in 2024, with a net income of $102 million and adjusted EBITDA of $182 million, despite facing operational hurdles such as longwall moves and the collapse of the Francis Scott Key Bridge.
The Pennsylvania Mining Complex (PAMC) produced 6.5 million tons of coal, with the company successfully increasing its export market presence, which accounted for 65% of its Q1 revenues. Still, the bridge collapse did impact their export capabilities, leading to a revised production guidance for the PAMC to 24-26 million tons and an increased PMC average cash cost of coal sold to $37.50-$39.50 per ton.
The company maintains strong liquidity with a net cash position of $65 million and total liquidity of $478 million, and remains committed to returning value to shareholders through share repurchases.
Key Takeaways
- CONSOL Energy (NYSE:)’s operational performance remained strong with a net income of $102 million.
- 65% of Q1 2024 revenues were generated from the export market.
- The collapse of the Francis Scott Key Bridge and longwall moves posed challenges, leading to a revised production guidance.
- The company reported a net cash position of $65 million, with total liquidity at $478 million.
- CONSOL Energy plans to make up for lost tonnage due to the Baltimore Port closure by the end of May.
- Share buybacks continue, with 89% of Q1 free cash flow used for repurchasing common stock.
Company Outlook
- CONSOL Energy aims to increase coal sales in the export market.
- Negotiations are underway for long-term fixed-price deals with domestic utilities.
- Adjustments to production guidance and cost of coal sold due to operational challenges.
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Bearish Highlights
- Free cash flow negatively impacted by approximately $81 million due to working capital changes.
- The Baltimore Port closure prevented the shipment of around 450,000 tons of coal.
- Equipment delivery delays and reduced manpower affected the Itmann Mining Complex.
Bullish Highlights
- Strong liquidity and financial flexibility through debt repayment and increased cash.
- The company has a solid contract book for 2024 and 2025 with fixed and variable pricing volume commitments.
- Strong demand for coal in export industrial markets and revenue visibility from long-term contracts.
Misses
- PMC production guidance reduced due to the bridge collapse.
- PMC average cash cost of coal sold guidance…
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