0001514705-26-000010
SEC filingNet loss of $38.8M in 2025 driven by $90.1M impairment and lower coke pricing; Adjusted EBITDA fell to $219.2M.
SunCoke Energy, Inc. is the largest independent producer of high-quality coke in the Americas, with over 65 years of production experience. The company owns and operates five cokemaking facilities in the U.S. (collective nameplate capacity of ~3.7 million tons per year) and operates one facility in Brazil under licensing and operating agreements (capacity 1.7 million tons). Coke is primarily used in blast furnace steelmaking and foundry production. The majority of sales come from long-term, take-or-pay agreements. Additionally, SunCoke owns an industrial services business providing material handling, mixing, and slag/scrap services globally.
SunCoke reports through two segments: Domestic Coke and Industrial Services. The Domestic Coke segment includes cokemaking facilities at Jewell, Indiana Harbor, Haverhill, Granite City, and Middletown, plus heat recovery operations that generate steam and electricity. The Industrial Services segment consists of Convent Marine Terminal (CMT), Kanawha River Terminal (KRT), and SunCoke Lake Terminal, along with fifteen slag removal and processing sites in the U.S., Brazil, Slovakia, and Spain.
Blast furnace coke is the primary product, sold under long-term contracts. Foundry coke is produced at Jewell for cupola furnaces. Waste heat is used to generate steam (sold under supply agreements) and electricity (sold into regional markets). Industrial services include material handling/mixing at terminals and on-site scrap and slag handling for steel manufacturers.
Domestic Coke sales are predominantly under long-term, take-or-pay agreements with major steel companies: Cliffs Steel, U.S. Steel, and Algoma Steel. Non-contracted blast coke is sold on the spot or export market. Foundry coke is sold via annual agreements. Industrial services contracts include fixed fees and volume-based charges, often with periodic inflation adjustments. Key customers are large integrated steel producers.
The cokemaking market is highly competitive. Competitors include other merchant coke producers and steelmakers' own captive facilities. International competition mainly comes from Chinese, Colombian, and Indonesian producers, but import economics often favor domestic supply. SunCoke believes its heat recovery technology, consistent quality, and environmental performance are competitive advantages. In industrial services, competition is limited to a few firms and potential customer self-performance.
SunCoke's strategy centers on securing long-term, take-or-pay agreements that consume capacity and provide stable cash flows. The company differentiates through proprietary heat recovery technology, which produces higher quality coke and generates energy byproducts, while reducing environmental footprint. Cost pass-through provisions in contracts mitigate exposure to coal price and inflation volatility. The company also optimizes its coke fleet (e.g., closure of Haverhill I) and seeks to re-contract existing facilities. Industrial services growth is driven by long-term customer relationships and geographic expansion.
As of December 31, 2025, SunCoke had approximately 2,477 employees across six countries, with 53% represented by labor unions under about 10 collective bargaining agreements. Safety performance is a priority: the Total Recordable Incident Rate (TRIR) for Coke and Terminals was 0.55 in 2025, significantly below industry averages. Regrettable turnover was less than 1%. The company emphasizes internal development, with nearly half of open positions filled internally. Leadership averages nearly 20 years of experience and 11 years tenure.
For fiscal year 2025, SunCoke Energy reported a net loss of $38.8 million compared to net income of $103.5 million in 2024. The decline was driven by a $90.1 million long-lived asset impairment at the Haverhill I facility, lower pricing and volumes in Domestic Coke, and transaction costs from the Phoenix Global acquisition. Revenue decreased 5.1% to $1,837.3 million from $1,935.4 million. Operating income swung to a loss of $44.4 million from income of $151.9 million, resulting in an operating margin of -2.4% versus 7.9% in the prior year. Adjusted EBITDA fell 19.6% to $219.2 million from $272.8 million, reflecting the impairment and lower segment earnings.
Domestic Coke segment revenue dropped 11.2% YoY to $1,613.8 million, primarily due to a 360 thousand ton decrease in sales volumes and lower pricing from contract mix and pass-through of coal costs. Adjusted EBITDA for the segment declined $64.7 million to $170.0 million, with margins compressing to 10.5% from 12.9%. Key headwinds included Algoma Steel's breach of contract, unfavorable coal-to-coke yields, and lower economics on the Granite City extension.
Industrial Services segment revenue surged to $187.8 million from $83.0 million, driven by five months of Phoenix Global results. Adjusted EBITDA increased $11.9 million to $62.3 million, with margins improving to 33.2% from 60.7% (prior year's high margin was partly due to a $9.5 million black lung gain). Excluding the acquisition, results were pressured by lower transloading volumes and pricing.
Corporate and Other Adjusted EBITDA loss widened to $13.1 million from $12.3 million, largely due to the absence of the prior year's black lung gain.
Management highlighted several strategic moves: the Haverhill II contract extension through 2028 with Cleveland-Cliffs, the Granite City extension through 2026 with U.S. Steel, and the planned closure of Haverhill I in Q1 2026. The acquisition of Phoenix Global expands the Industrial Services footprint. Liquidity remains solid with $88.7 million cash and $132.0 million revolver availability as of December 31, 2025. The company expects to manage ongoing capital expenditures ($66.8 million in 2025) and has maintained its quarterly dividend. No formal guidance was provided, but the extension of key contracts and cost management initiatives suggest a focus on stabilizing Domestic Coke cash flows and scaling Industrial Services.
Cash and cash equivalents declined sharply to $88.7 million from $189.6 million, reflecting $271.5 million used for the Phoenix Global acquisition (net of cash acquired). Total debt rose to $685.5 million (from $492.3 million) as the company drew $193.0 million on its $325.0 million Revolving Facility (due 2030), partially offset by $238.0 million in repayments. The consolidated leverage ratio covenant is 4.50:1.00; the company remained in compliance. Inventory increased to $219.9 million, driven by higher coal ($116.5M) and coke ($39.7M) stockpiles. Shareholders' equity fell to $597.3 million (from $680.2 million) due to the net loss of $44.2 million and dividends of $41.6 million. Export/import credit facilities are not disclosed.
Total purchase commitments aggregate to approximately $1.86 billion. Within the Domestic Coke segment, long-term take-or-pay coke sales agreements have roughly 18.5 million tons of unsatisfied performance obligations with a weighted average remaining term of eight years. For industrial services, estimated fixed fee and take-or-pay revenues from multi-year contracts total $587.1 million over the next 11 years ($350.4 million in 2026-2028, $152.4 million in 2029-2031, and $84.3 million thereafter). These are not purchase obligations per se but future revenue under contracts; no separate purchase commitment table for supplies or capital is disclosed.
No share repurchase program is active or new authorization disclosed. Dividends totaled $41.6 million in 2025 (up from $38.0 million in 2024). Capital expenditures were $66.8 million, down from $72.9 million in 2024, with $39.8 million allocated to Industrial Services (including Phoenix Global). Debt activity: net debt increased by $193 million (drawn $431.0M, repaid $238.0M on Revolving Facility). The company also incurred $2.1M in debt issuance costs and $0.2M loss on extinguishment. No new senior notes were issued.
Following the Phoenix Global acquisition, SunCoke realigned into two reportable segments: Domestic Coke and Industrial Services. Domestic Coke revenue fell 11.2% to $1,613.8M (from $1,817.3M) with Adjusted EBITDA of $170.0M (down from $234.7M), partly due to the $90.1M impairment at Haverhill I triggered by Algoma Steel's contract breach. Industrial Services revenue surged to $187.8M (from $83.0M) including five months of Phoenix Global, with Adjusted EBITDA of $62.3M (up from $50.4M). International (Brazil) operations are now reported in Corporate and Other ($35.7M revenue). Domestic assets total $1,650.9M; international assets $139.0M. Geographic detail beyond domestic/international is limited.
SunCoke faces significant operational hazards inherent in cokemaking and industrial services, including equipment failures, fires, explosions, and adverse weather. The document specifically notes that failure to maintain coke oven temperatures could compromise battery integrity and halt production. The disruption of slag services or other critical operations could materially impact customers and financial performance.
A dominant theme is the company's heavy reliance on a limited number of customers under long-term take-or-pay agreements. The 2025 breach by Algoma Steel, which refused to accept coke, led to a $90.1 million impairment at the Haverhill I facility. This event underscores the material risk of customer non-performance, contract renegotiation, or bankruptcy, which could severely impact cash flows and asset values.
The cokemaking business faces structural competition from alternative steelmaking technologies (EAF, natural gas injection) and global coke dumping, particularly from China and the EU. The industrial services segment is exposed to declining thermal coal demand due to natural gas competition and renewable energy mandates. These long-term trends could erode revenue and profitability.
Extensive environmental, health, and safety regulations—including new EPA MACT standards in 2024—impose significant compliance costs and operational constraints. Failure to maintain permits or comply with emissions standards could lead to fines, shutdowns, or increased capital expenditures. Climate-related regulations on GHG emissions further add uncertainty.
The company faces $693 million in debt maturities over the next five years, creating refinancing risk. The recent impairment highlights how customer defaults can directly affect balance sheet strength. Inflation in input costs (coal, labor, equipment) may compress margins if not passed through under long-term contracts.
While no material incidents have occurred to date, the risk of cyberattacks—including from ransomware, phishing, and AI-based threats—poses potential operational disruption, data loss, and legal liability. The company relies on third-party vendors for critical IT systems, increasing exposure.
Operations in Brazil, Slovakia, and Spain expose SunCoke to political instability, currency fluctuations, trade policy changes, and anti-corruption laws (FCPA). These risks could affect profitability and cash flows from foreign subsidiaries.