The Coal Trader

Coal Mining Warrior Met Coal (HCC)

Warrior Met Coal Delivers Q4 2023 Earnings

Warrior Met Coal reported solid financial results for Q4 2023, exceeding analyst expectations and building on the previous year’s performance. Here are the key takeaways:


  • Q4 net income: $128.9 million ($2.47/share), up from $99.7 million ($1.93/share) YoY.
  • Q4 revenue: $364 million, up 6% YoY, on 1.53 million short tons sold (also up 6%).
  • Full-year 2023 sales: 7.518 million short tons, exceeding guidance of 7.1-7.7 million.
  • Full-year 2023 production: 7.646 million short tons, beyond the upper end of guidance (6.8-7.4 million).
  • Adjusted EBITDA: $163.7 million in Q4, up 11% YoY.

Blue Creek Project Update:

  • Development progressing on schedule, with $127.8 million invested in Q4 and $319.1 million in 2023.
  • 2024 spending expected to be $325-$375 million.
  • Project scope changes add $120-$130 million to total cost, increasing it to $820-$830 million.

2024 Guidance:

  • Sales: 7.4-8.2 million short tons.
  • Production: 7.4-8.0 million short tons.
  • Cash cost of sales: $125-$135/ton, slightly above 2023 due to inflation.

Call Highlights:

  • Capital Allocation: Blue Creek project remains top priority. If cash remains after funding (estimated at $325-$375 million in 2024), special dividends may be considered.
  • Sales Mix: 65% of 2024 sales expected to go to Asia. Mine No. 7 sales mostly contracted on FOB basis, while Mine No. 4 sales divided between contracts and spot market.
  • Transportation: Demopolis Lock closure currently has minimal impact due to rail shipments. Low water in Panama Canal and Red Sea tensions impacting CFR business with higher freight costs.
  • Blue Creek Production: Continuous miner production to begin in Q3 2024 with stockpiling until wash plant launch in mid-2025.
  • Workforce Expansion: Hiring 250 additional miners in 2024, with 100 for Blue Creek.
  • Longwall Moves: Four planned for 2024, distributed across quarters.

Overall, Warrior Met Coal delivered a strong Q4 and outlined bullish guidance for 2024. Continued Blue Creek project development and increased production bode well for the company’s future growth.