8-K: SunCoke Energy Reports Q4/FY25 Loss, Guides 2026 EBITDA

SunCoke Energy reported a net loss for Q4 and full-year 2025, driven by one-time charges and contract issues, while providing 2026 Adjusted EBITDA guidance of $230M-$250M.

Summary

• FY 2025 Consolidated Adjusted EBITDA was $219.2 million, slightly below the objective of $220 million $225 million.
• Q4 2025 Consolidated Adjusted EBITDA was $56.7 million, a decrease of $9.4 million from the prior year quarter.
• FY 2025 Net Loss attributable to SXC was $44.2 million, or ($0.52) per diluted share.
• Q4 2025 Net Loss attributable to SXC was $85.6 million, or ($1.00) per diluted share.
• One-time items, including a $90.1 million non-cash asset impairment charge due to the closure of Haverhill I, impacted FY 2025 net loss by $109.3 million ($83.1 million net of tax) and Q4 2025 by $95.7 million ($72.7 million net of tax).
• The acquisition of Phoenix Global was completed on August 1, 2025.
• The Granite City cokemaking contract was extended through December 31, 2026, at 2025 economics.
• The Haverhill II cokemaking contract with Cleveland-Cliffs was extended through December 31, 2028, for 500Kt per year.
• A breach of contract by Algoma impacted Domestic Coke sales volumes and Adjusted EBITDA.
• FY 2025 Operating Cash Flow was $109.1 million.
• 2026 Consolidated Adjusted EBITDA is guided to be between $230 million and $250 million.
• 2026 Free Cash Flow is guided to be between $140 million and $150 million.
• Domestic Coke production capacity has been revised to approximately 3.7 million tons following the Haverhill I closure, with the operating coke fleet at full utilization and sold out for 2026.
• A Middletown turbine failure is impacting power production and is expected to be back in operation mid-year, noted as an insured event.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed report with significant one-time charges leading to a net loss and increased leverage, partially offset by strategic acquisitions, contract extensions, and positive 2026 guidance for Adjusted EBITDA and Free Cash Flow.

Positives

• Achieved best-in-class safety performance with a Total Recordable Incident Rate (TRIR) of 0.55 for FY 2025 (excluding Phoenix Global).
• Successfully completed the acquisition of Phoenix Global on August 1, 2025, which contributed to Industrial Services segment growth.
• Extended Granite City cokemaking contract with U.S. Steel through December 31, 2026.
• Extended Haverhill II cokemaking contract with Cleveland-Cliffs through December 31, 2028, for 500Kt per year.
• Secured a new Q2 2025 take-or-pay coal handling agreement at Kanawha River Terminal through Q2 2028.
• Anticipates continuation of quarterly dividend of $0.48/share.
• Expects 2026 Adjusted EBITDA of $230M $250M, driven by a full year of Phoenix Global and improved market conditions for terminals.
• Expects 2026 Free Cash Flow of $140M $150M, to be used for debt paydown and dividends.
• Domestic Coke fleet is at full utilization and sold out for 2026, with modestly higher Adjusted EBITDA per ton expected.

Negatives

• FY 2025 Consolidated Adjusted EBITDA of $219.2M was slightly below the company's objective of $220M $225M.
• Q4 2025 EPS of ($1.00) and FY 2025 EPS of ($0.52) represent significant decreases from prior year periods, primarily due to one-time items.
• Net loss attributable to SXC for FY 2025 was $44.2M and for Q4 2025 was $85.6M.
• One-time items totaling $109.3M ($83.1M net of tax) for FY 2025 and $95.7M ($72.7M net of tax) for Q4 2025 significantly impacted results, including a $90.1M non-cash asset impairment charge due to the closure of Haverhill I.
• Breach of contract by Algoma led to lower coke sales volumes and impacted Domestic Coke Adjusted EBITDA.
• Lower economics on the Granite City contract extension contributed to reduced Domestic Coke segment performance.
• Change in mix of contract and spot coke sales negatively impacted Domestic Coke segment.
• Softer market conditions at terminals within the Industrial Services segment resulted in lower handling volumes.
• FY 2025 Operating Cash Flow decreased to $109.1M from $168.8M in FY 2024.
• Middletown turbine failure impacting power production, expected to be back mid-year.
• Severe winter weather impacted several sites.
• Gross leverage increased to 3.16x at YE 2025 from 1.83x at YE 2024, exceeding the long-term target of 3x.

Risks

• Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties that could cause actual results and financial condition to differ materially.
• Unpredictable or unknown factors not discussed could have material adverse effects on forward-looking statements.
• Market conditions for terminals handling volumes are largely market-driven, and current guidance assumes improved market conditions in 2026, which may not materialize.
• The company's 2026 guidance is based on current estimates and assumptions that are subject to change and may be outside the control of the company.
• The breach of contract by Algoma Steel has led to the closure of Haverhill I and a $90.1 million impairment charge, indicating counterparty risk.
• Lower economics on the Granite City contract extension could impact future profitability.
• Middletown turbine failure impacting power production, though an insured event, still presents operational disruption risk until mid-year.

Future Outlook

SunCoke Energy expects 2026 Consolidated Adjusted EBITDA to be between $230 million and $250 million, driven by a full year of Phoenix Global operations and anticipated improvement in terminals handling volumes. Free Cash Flow is projected to be $140 million to $150 million, which will be used for debt paydown and continued quarterly dividend payments. The company anticipates Domestic Coke sales of approximately 3.4 million tons, with the operating coke fleet at full utilization and sold out for the year, expecting modestly higher Adjusted EBITDA per ton.

Management Comments

• "We are pleased with the SunCoke team's execution on our operational plan, including our safety performance in 2025. SunCoke achieved an excellent annual Total Recordable Incident Rate (TRIR) of 0.55, excluding Phoenix Global. This represents best-in-class performance and I would like to thank the team for their dedication and commitment." Katherine Gates, President and CEO.
• "We also made significant progress on our capital allocation goals, with the acquisition of Phoenix Global and the continuation of our quarterly dividend." Katherine Gates, President and CEO.
• "Our fourth quarter and full-year results, when compared to prior year periods, were impacted by the closure of our Haverhill I facility, resulting in a non-cash asset impairment charge, the breach of contract by Algoma, lower Granite City contract extension economics, and the change in mix of contract and spot coke sales." Katherine Gates, President and CEO.
• "In our Industrial Services segment, Phoenix Global performed in line with our expectations, while weak market conditions persisted throughout the year, impacting our terminals handling volumes." Katherine Gates, President and CEO.
• "Looking ahead to 2026, we have optimized our coke fleet with the closure of Haverhill I, resulting in revised Domestic Coke production capacity of approximately 3.7 million tons. With extended contracts at Granite City and Haverhill II, and having finalized all foundry and spot coke sales, we will be running at full utilization and are sold out for the year." Katherine Gates, President and CEO.
• "Our 2026 Adjusted EBITDA guidance range of $230 million to $250 million reflects our expectations for improvement in market conditions for our terminals and a full year of Phoenix Global." Katherine Gates, President and CEO.
• "The breach of contract by Algoma and subsequent closure of Haverhill I will drive lower coke sales tons, but at higher margins, resulting in a modest decrease in Domestic Coke Adjusted EBITDA as compared to 2025." Katherine Gates, President and CEO.
• "We remain focused on executing against our well established objectives of exceptional safety performance, operational excellence, and a balanced approach to capital allocation. We plan to use our excess cash flow in 2026 to pay down debt, continue the distribution of the quarterly dividend, and continue to assess growth opportunities. We are positioning the Company for sustained success and delivering significant value to SunCoke stakeholders." Katherine Gates, President and CEO.

Industry Context

StockSavvy.ai notes that SunCoke Energy's performance reflects the ongoing dynamics in the steel and industrial services sectors. While the acquisition of Phoenix Global positions the company for diversification and growth in industrial services, the Domestic Coke segment remains susceptible to contract negotiations, customer breaches, and shifts in coke sales mix, as evidenced by the Algoma breach and Granite City contract economics. The focus on full utilization of the optimized coke fleet and securing long-term contracts is a strategic response to these market realities, aiming to stabilize revenue streams in a cyclical industry.

Comparison to Industry Standards

• SunCoke's FY 2025 TRIR of 0.55 (excluding Phoenix Global) represents best-in-class safety performance, indicating a strong operational safety culture compared to general industrial benchmarks.
• The company's gross leverage of 3.16x at year-end 2025 exceeds its long-term target of 3x, suggesting a higher debt burden compared to its own internal benchmarks and potentially some industry peers who maintain lower leverage ratios for financial flexibility.
• The closure of Haverhill I due to Algoma's breach of contract highlights the inherent counterparty risk in long-term supply agreements within the steel industry, a common challenge for suppliers tied to specific customer operations.

Stakeholder Impact

• Shareholders: Impacted by net losses, decreased EPS, and increased leverage, but also by continued quarterly dividends and positive FCF guidance for debt paydown.
• Employees: Affected by restructuring costs and site closure costs primarily associated with the Phoenix Global acquisition and Haverhill I closure.
• Customers (Granite City, Cleveland-Cliffs): Benefit from extended coke supply contracts, ensuring continued supply.
• Customers (Algoma Steel): Breach of contract led to termination of supply from Haverhill I.
• Creditors: Gross leverage increased to 3.16x, but the company plans to use 2026 FCF for debt paydown, aiming to reduce leverage below 3x.

Next Steps

• Successfully execute on operational and capital plan.
• Continue to deliver strong safety and environmental performance.
• Further strengthen customer relationships and grow market share in the foundry business.
• Expand product and customer base in the Industrial Services segment.
• Achieve 2026 financial objectives of $230M $250M Adjusted EBITDA and $140M $150M Free Cash Flow.
• Use Free Cash Flow for debt paydown and continued payment of dividends in 2026.
• Continue to assess growth opportunities.
• Continue to provide reliable, high-quality products and services to customers.

Key Dates

Recommendation

The company reported a net loss for FY25, driven by significant one-time charges and contract issues, and saw an increase in gross leverage above its target. However, strategic moves like the Phoenix Global acquisition and key contract extensions, coupled with positive 2026 Adjusted EBITDA and Free Cash Flow guidance, suggest a path to recovery and deleveraging. The stock is a 'hold' as the company navigates these challenges and executes on its strategic initiatives, with potential for improvement but also ongoing risks.

Keywords

SunCoke Energy, SXC, Earnings, Q4 2025, FY 2025, 2026 Guidance, Adjusted EBITDA, Net Loss, Coke Production, Industrial Services, Phoenix Global, Contract Extension, Algoma Breach, Haverhill I Closure, Capital Allocation, Free Cash Flow, Steel Industry, Logistics, Risk Factors