Consol Energy Q2 Earnings Call: Robust Cash Flow Amid Challenges and Soft Markets

Consol Energy reported Q2 adjusted EBITDA of $144mln and free cash flow of $131mln, despite a net loss of $37mln. The company increased its merger-related annual synergy target to $150-$170mln and prioritized shareholder returns, distributing $87mln through buybacks and dividends. Domestic thermal coal markets showed signs of strengthening, and new US legislation provided tax credits and lowered royalty rates, enhancing Consol's competitiveness. However, metallurgical markets remain soft and the Leer South mine continues to face issues.

Core Natural Resources, Inc. (NYSE: CNR) reported its second-quarter 2025 results, showcasing a robust financial performance despite a net loss of $36.6 million. The company generated net cash provided by operating activities of $220.2 million and free cash flow of $131.1 million. Adjusted EBITDA for the quarter stood at $144.3 million, which included Leer South fire extinguishment and idle mine cash costs of $21.2 million.

Paul A. Lang, the company's CEO, highlighted the value-driving potential of the combined platform, noting the execution at a high level at the Pennsylvania Mining Complex (PAMC) and Leer longwall operations. The company's merger-related annual synergies target was increased to between $150 million and $170 million, reflecting a 30 percent aggregate increase from the initial guidance.

Core Natural Resources returned $87.1 million to stockholders via share buybacks and quarterly dividends, investing $81.9 million to repurchase 1.2 million shares. The company's capital return program, targeting the return of around 75 percent of free cash flow, has now repurchased 2.6 million shares, or roughly 5 percent of total shares outstanding.

The high c.v. thermal coal segment achieved an 18-percent increase in sales volumes, with realized coal revenue per ton sold of $60.50. The metallurgical segment faced challenges due to the longwall outage at Leer South, but overall executed well, led by the Leer mine. The Powder River Basin segment turned in a solid performance, with sales volumes totaling 12.6 million tons.

The company's liquidity position improved, with total liquidity of $948 million, including $413 million in cash and cash equivalents. Core expects to resume longwall production at Leer South by the end of October, with insurance recoveries associated with developments at Leer South exceeding $100 million.

New U.S. legislation, including the One Big Beautiful Bill Act (OBBBA), provided tax credits and lowered royalty rates, enhancing Core's competitiveness. However, the metallurgical markets remain soft, and the Leer South mine continues to face challenges.

References:
[1] https://investors.corenaturalresources.com/2025-08-05-Core-Natural-Resources-Reports-Second-Quarter-2025-Results