CONSOL Energy (CEIX) reported mixed results for Q4 2023, with net income declining but total revenue and other income increasing. The company highlighted strong export performance, share repurchases, and provided 2024 guidance.
Key Q4 2023 highlights:
- Net income: $157.1 million, down from $193.0 million in Q4 2022.
- Total revenue and other income: $649.4 million, up from $637.2 million in Q4 2022.
- PAMC coal sales: 6.8 million tons at $509.0 million, up from 6.2 million tons and $468.5 million in Q4 2022.
- CMT shipments: 4.7 million tons, up from 3.6 million tons in Q4 2022.
- Itmann sales: 159,000 tons, up from 123,000 tons in Q3 2023.
- Share repurchases: 1.1 million shares at an average price of $100.84 per share.
- Debt reduction: $6.1 million, leaving a net cash position of $88.4 million.
Exports were a major driver of performance:
- 60% of PAMC volume moved to the export market in 2023.
- 10% of PAMC volume placed in the metallurgical market, potentially all exported.
2024 guidance:
- PAMC coal sales volume: 25.0 – 27.0 million tons.
- PAMC revenue per ton: $62.50 – $66.50.
- Itmann sales volume: 600 – 800 thousand tons.
- Capital expenditures: $175 – $200 million.
Key questions for management:
- Export outlook: Can CEIX provide details on Q1 2024 export expectations and breakdown of deliveries, especially to India?
- Metallurgical sales: Was all PAMC metallurgical coal exported?
- Operating costs: What was the impact of lower power costs on PAMC costs?
- CMT: Plans for handling third-party coal in the future?
- Itmann sales: Breakdown of 2024 sales contracts (domestic/export, fixed/indexed price)?
- 2024 guidance: Breakdown of contracted PAMC sales by fixed price and indexed, 2024 export volume expectations, and expected crossover metallurgical volume?
Overall, CEIX delivered solid Q4 results with strong export performance and a focus on shareholder returns through share repurchases and debt reduction. The 2024 guidance suggests continued optimism but raises questions about market dynamics and future strategies.
