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Signature Sponsor
November 6, 2025 - Warrior Met Coal, Inc. (NYSE: HCC) has announced results for the third quarter of 2025. Warrior is the leading dedicated U.S.-based producer and exporter of high-quality steelmaking coal for the global steel industry.
Warrior reported net income for the third quarter of 2025 of $36.6 million, or $0.70 per diluted share, a decrease from net income of $41.8 million, or $0.80 per diluted share, in the third quarter of 2024. The Company reported Adjusted EBITDA of $70.6 million in the third quarter of 2025 compared to Adjusted EBITDA of $78.5 million in the third quarter of 2024. These results continue to be impacted by significantly weaker steelmaking coal market conditions driven primarily by ongoing depressed global steel demand, excess Chinese steel exports and ample supply of steelmaking coal globally. As a result, the average index price for premium low-vol steelmaking coal was 13% lower than the prior year's comparable quarter. At the same time, Warrior reported a 27% increase in total sales volumes and a 17% increase in total production volumes compared to the prior year comparable quarter, primarily attributable to the Blue Creek mine.
Third Quarter and Other Recent Highlights
“It is gratifying to see our detailed planning and laser-focused execution result in the successful startup of longwall operations at our transformational Blue Creek mine eight months ahead of schedule, while keeping the overall project on budget,” commented Walt Scheller, CEO of Warrior. “This milestone reflects Warrior's unwavering commitment to operational excellence and highlights the exceptional teamwork and dedication of our employees. Their efforts have propelled us forward and enhanced our position for sustained growth and long-term success.”
“The early startup of Blue Creek's longwall significantly increases our production capacity and has already begun contributing to revenue and free cash flow. As a result of our success on this project, we have raised our full-year production volume guidance by 10%, further reinforcing Warrior's position as the premier U.S. pure-play producer of premium steelmaking metallurgical coal,” Mr. Scheller concluded.
Strategic Expansion Through Federal Lease Acquisition
At the end of the third quarter, Warrior learned that it was the successful bidder in a federal coal lease sale administered by the Bureau of Land Management. The acquisition includes approximately 14,050 acres in Tuscaloosa County, Alabama, with an estimated 58 million short tons of high-quality steelmaking coal reserves. The total bid for the leases was $46.8 million.
“The purchase of these leases enables us to enhance our long-term growth strategy, bolstering our reserve base and extending the life of our core mining operations,” Mr. Scheller said. “The newly leased areas are adjacent to existing infrastructure, allowing for efficient integration into our current operations and capital planning.”
“While several regulatory and administrative steps remain before Warrior enters into a lease agreement with the Bureau of Land Management, we are actively engaged with the relevant agencies to ensure timely progress and compliance with all requirements,” Mr. Scheller concluded. “The combination of this acquisition, once it closes, and the continued ramping up of production at Blue Creek positions us to continue to meet sustained global demand for premium steelmaking coal. With world class assets, a low-cost position, and disciplined capital deployment, we remain focused on delivering long-term shareholder value through strategic resource development and operational excellence.”
Operating Results
Sales volumes in the third quarter of 2025 were a record 2.4 million short tons compared to 1.9 million short tons in the third quarter of 2024, representing a 27% increase, driven primarily by sales of Blue Creek steelmaking coal of 378 thousand short tons.
The Company produced 2.2 million short tons of steelmaking coal in the third quarter of 2025, compared to 1.9 million short tons in the third quarter of 2024, representing a 17% increase, including 175 thousand short tons produced at Blue Creek. Inventory levels decreased slightly to 1.1 million short tons as of September 30, 2025, compared to 1.2 million short tons as of June 30, 2025.
Additional Financial Results
Total revenues were $328.6 million for the third quarter of 2025, which compares to total revenues of $327.7 million for the third quarter of 2024, reflecting the 27% increase in sales volumes, offset partially by a decline in the average net selling price. The average net selling price of the Company's steelmaking coal decreased 21% from $171.92 per short ton in the third quarter of 2024 to $135.87 per short ton in the third quarter of 2025. The average gross selling price realization was approximately 83% of the Platts Premium Low Vol FOB Australian index price for the third quarter of 2025 compared to 93% for the third quarter of 2024, primarily driven by a higher sales mix of high-vol A steelmaking coal and a lower price index relativity to premium low-vol.
Cost of sales for the third quarter of 2025 were $239.5 million compared to $231.6 million for the third quarter of 2024. Cash cost of sales (free-on-board port) for the third quarter of 2025 were $237.2 million, or 74.1% of mining revenues, compared to $229.7 million, or 71.8% of mining revenues in the same period of 2024. Cash cost of sales (free-on-board port) per short ton decreased to $100.73 in the third quarter of 2025 from $123.45 in the third quarter of 2024. This was driven primarily by lower steelmaking coal prices and their effect on Warrior's variable cost structure, primarily for wages, transportation and royalties combined with the Company's disciplined approach to cost control and operational efficiency and the sales mix of Blue Creek coal and its inherent lower cost structure.
Selling, general and administrative expenses for the third quarter of 2025 were $17.2 million, or 5.2% of total revenues, and were higher than the same period last year of $11.5 million due to higher employee-related expenses.
Depreciation and depletion expenses for the third quarter of 2025 were $43.6 million, or 13.3% of total revenues and were higher than the same period last year of $36.6 million, or 11.2% of total revenues. This was primarily due to depreciation expense recognized on additional assets placed into service at Blue Creek and higher sales volumes. Warrior achieved net interest income of $2.1 million during the third quarter of 2025, which is lower than the prior year due to lower interest income on lower cash balances and lower earned rates of return combined with higher interest expense due to interest on new leased equipment.
Income tax benefit was $13.7 million in the third quarter of 2025 on a pre-tax income of $22.8 million. The effective income tax rate for the nine months ended September 30, 2025 varied from the statutory federal income tax rate of 21%, primarily due to tax benefits recognized for depletion expense, marginal gas well tax credits and foreign-derived intangible income deduction which exceeded forecasted pre-tax book income. This compares to an income tax expense of $4.6 million on pre-tax income of $46.4 million in the third quarter of 2024.
Cash Flow and Liquidity
The Company generated positive cash flows from operations of $104.7 million in the third quarter of 2025, compared to $62.2 million in the third quarter of 2024. Net working capital, excluding cash, for the third quarter of 2025 decreased by $30.7 million from the second quarter of 2025, primarily reflecting lower accounts receivable and higher accrued expenses.
Cash used in investing activities for capital expenditures and mine development for the third quarter of 2025 was $124.2 million compared to $122.8 million in the third quarter of 2024. The third quarter of 2025 includes $64.2 million of capital expenditures for the continued development of Blue Creek, which brings the total year-to-date capital expenditures to $171.2 million and project-to-date capital expenditures to $887.7 million. In addition, Warrior made the first payment of five installments of $9.4 million for the new federal coal leases as described above. Free cash flows in the third quarter of 2025 were negative $19.5 million compared to free cash flows of negative $60.6 million in the third quarter of 2024, driven primarily by the continued development of Blue Creek.
Cash flows used in financing activities for the third quarter of 2025 were $17.8 million, primarily due to principal repayments of financing lease obligations of $13.5 million and payment of a regular quarterly dividend of $4.2 million.
The Company’s total liquidity as of September 30, 2025 was $525.2 million, consisting of cash and cash equivalents of $336.3 million, short-term investments of $46.4 million, which is net of $9.8 million posted as collateral, long-term investments of $2.0 million and available liquidity under its ABL Facility of $140.5 million, net of outstanding letters of credit of $2.5 million.
Capital Allocation
On October 28, 2025, the Board declared a regular quarterly cash dividend of $0.08 per share, which the Company plans to distribute on November 14, 2025, to stockholders of record as of the close of business on November 7, 2025.
Company Outlook
Due to the accelerated startup of the Blue Creek longwall, the Company is updating and increasing its production (approximately 10%) and sales volume guidance for the full year 2025. In addition, the Company is lowering its guidance range for cash cost of sales (free-on-board port) per short ton to reflect more recent actual trends. This guidance is subject to many risks that may impact performance, such as global trade and tariff uncertainties, market conditions in the steel and steelmaking coal industries and overall global economic and competitive conditions, all as more fully described under Forward-Looking Statements. Warrior will continue to evaluate the impact of trade and tariff uncertainties on its business for the remainder of the fiscal year.
The Company's 2025 production volume guidance contains approximately 1.8 million short tons of high-vol A steelmaking coal from the Blue Creek mine, of which approximately two-thirds is expected to be sold in 2025.
The Company's guidance for its capital expenditures consists of sustaining capital spending of approximately $90-$100 million, including regulatory gas requirements and final 4 North bunker construction, and discretionary capital spending of $225-$250 million for the development of the Blue Creek reserves. While the longwall operations have recently commenced, there remains a significant amount of surface infrastructure to be completed to finish the overall project. Warrior remains on budget and expects total Blue Creek project capital expenditures of $995 million to $1.075 billion. The remaining amounts are expected to be primarily spent by the end of the first quarter of 2026.
Key factors that may affect the full year 2025 outlook include:
The Company does not provide reconciliations of its outlook for cash cost of sales (free-on-board port) to cost of sales in reliance on the unreasonable efforts exception provided for under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable, without unreasonable efforts, to forecast certain items required to develop the meaningful comparable Generally Accepted Accounting Principles ("GAAP") cost of sales. These items typically include non-cash asset retirement obligation accretion expenses and other non-recurring indirect mining expenses that are difficult to predict in advance in order to include in a GAAP estimate. The unavailable information could have a significant impact on the Company's reported financial results.
Use of Non-GAAP Financial Measures
This release contains the use of certain non-GAAP financial measures. These non-GAAP financial measures are provided as supplemental information for financial measures prepared in accordance with GAAP. Management believes that these non-GAAP financial measures provide additional insights into the performance of the Company, and they reflect how management analyzes Company performance and compares that performance against other companies. These non-GAAP financial measures may not be comparable to other similarly titled measures used by other entities. The definition of these non-GAAP financial measures and a reconciliation of non-GAAP to GAAP financial measures is provided in the financial tables section of this release.
Conference Call
The Company will hold a conference call to discuss its third quarter 2025 results today, November 5, 2025, at 4:30 p.m. ET. To listen to the event, live or access an archived recording, please visit http://investors.warriormetcoal.com. Analysts and investors who would like to participate in the conference call should dial 1-844-340-9047 (domestic) or 1-412-858-5206 (international) 10 minutes prior to the start time and reference the Warrior Met Coal conference call. Telephone playback will also be available from 6:30 p.m. ET on November 5, 2025 until 6:30 p.m. ET on November 12, 2025. The replay will be available by calling: 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and entering passcode 1271409.
About Warrior
Warrior is a U.S.-based, environmentally and socially minded supplier to the global steel industry. It is dedicated entirely to mining non-thermal metallurgical (met) steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. Warrior is a large-scale, low-cost producer and exporter of premium quality met coal, also known as hard-coking coal (HCC), operating highly efficient longwall operations in its underground mines based in Alabama. The HCC that Warrior produces from the Blue Creek coal seam contains very low sulfur and has strong coking properties. The premium nature of Warrior’s HCC makes it ideally suited as a base feed coal for steel makers. For more information, please visit www.warriormetcoal.com.
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