Warrior Met Coal's Q4 2024: Discrepancies in Sales Expectations, Price Assumptions, and Production Ramp-Up

These are the key contradictions discussed in Warrior Met Coal's latest 2024 Q4 earnings call, specifically including: Sales and Realization Expectations, Price Assumptions, Blue Creek's Production Ramp-up and Inventory Management, and Cash Cost Guidance:



Sales and Production Volume Increase:
- Warrior reported fourth-quarter sales volume of 1.9 million short tons, up 23% from the same quarter last year, and production volume of 2.1 million short tons, up 7%.
- This increase was driven by robust operational performance, particularly from Mine 4, and a strategic shift in sales geography with a rise in sales to Asia from 25% to 38%.

Market Conditions and Pricing Environment:
- The company faced low steelmaking coal prices, with the PLV FOB Australia index ending the fourth quarter at $178 per short ton, down 7% from the previous quarter, and the PLV CFR China Index at $180.
- This decline was due to factors like excess Chinese steel exports, weak demand, and ample supply, challenging profitability.

Blue Creek Project Progress**:
- Warrior invested over $104 million in the fourth quarter for the Blue Creek project, with total investments reaching $350 million for the year.
- The project remains on schedule and budget, with production from the new mine expected to start in the second half of 2025, anticipated to produce at least 4.5 million short tons annually post-longwall startup.

* **Financial Performance and Guidance:
- Warrior's adjusted EBITDA for the fourth quarter was $53 million, down from $164 million in the same quarter last year, primarily due to a 34% lower average net selling price.
- Despite the weak market conditions, the company expects to maintain production and sales volume growth in 2025, although cash flows may be affected by higher inventories and accounts receivable due to Blue Creek production.