CANONSBURG, Pa., Oct. 31, 2023 /PRNewswire/ — Today, CONSOL Energy Inc. (NYSE: CEIX) reported financial and operating results for the period ended September 30, 2023.
Third Quarter 2023 Highlights Include:
- GAAP net income of $100.7 million and GAAP dilutive earnings per share of $3.11;
- Adjusted EBITDA1 of $185.5 million;
- Total revenue and other income of $569.9 million;
- Net cash provided by operating activities of $162.7 million;
- Free cash flow1 of $120.4 million;
- 77% of 3Q23 free cash flow1 returned to shareholders via stock repurchases;
- Repurchased 4.1 million shares of CEIX common stock at a weighted average price of $68.97 per share year-to-date through October 31, 2023;
- Debt repayments of $29.9 million, including $24.1 million to fully retire Second Lien Notes;
- 71% of year-to-date total recurring revenues and other income1 derived from export sales and 61% derived from non-power generation sales;
- Pennsylvania Mining Complex (PAMC) is near-fully contracted for 4Q23 and improved its contracted position to 21.5 million tons in 2024 and 10.8 million tons in 2025; and
- Itmann production volume improved 30% compared to 2Q23.
Management Comments
“During the third quarter of 2023, we generated $120 million in free cash flow1, which was deployed toward further strengthening our balance sheet and retiring 1 million shares of our outstanding common stock in the open market,” said Jimmy Brock, Chief Executive Officer of CONSOL Energy Inc. “On a year-to-date basis, we’ve generated $639 million in net cash provided by operating activities and more than $500 million in free cash flow1, which was used to fully retire the remaining balances of our Term Loan B and Second Lien Notes, as well as to repurchase 4.1 million shares of our outstanding common stock. Our ongoing pivot into the export markets continued during the quarter, as the majority of our revenue was generated from sales into the seaborne markets and non-power generation industries. From an operational standpoint, in just nine months, our CONSOL Marine Terminal has achieved a year-to-date throughput level of 14.2 million tons. We also advanced our contracting progress during the quarter and have improved our 2024 and 2025 sales books to 21.5 million tons and 10.8 million tons, respectively.”
“On the safety front, our Bailey Preparation Plant, Itmann Preparation Plant and CONSOL Marine Terminal each had ZERO employee recordable incidents year-to-date through the third quarter of 2023. Our year-to-date total recordable incident rate across our coal mining segment was approximately 40% below the national average for underground bituminous coal mines.”
Pennsylvania Mining Complex Review and Outlook
PAMC Sales and Marketing
CEIX sold 6.1 million tons of PAMC coal during the third quarter of 2023, generating realized coal revenue1 of $431.1 million for the PAMC segment and an average realized coal revenue per ton sold1 of $70.34. This compares to 5.3 million tons sold, generating realized coal revenue1 of $384.3 million and an average realized coal revenue per ton sold1 of $72.83 in the year-ago period. The improvement in realized coal revenue1 was mainly driven by the increased sales tonnage during the quarter due to the availability of the fifth longwall this year, which provided increased productive capacity and additional flexibility, compared to the prior year period. Additionally, we negotiated partial buyouts of some coal volumes from customer coal contracts in exchange for payment of certain fees to us during the third quarter of 2023, which contributed $16.4 million to our miscellaneous other income versus being recognized as coal revenue had our customers not bought out these partial coal volumes.
On the marketing front, coal demand remained somewhat muted for the power generation markets during the third quarter but began to improve overall after a very weak second quarter. Domestically, Henry Hub natural gas spot prices and PJM West day-ahead power prices improved 20% and 13%, respectively, in the third quarter compared to 2Q23. Internationally, API2 spot prices averaged $118/metric ton during 3Q23, a 5% decline versus the second quarter of 2023. However, we continued to leverage the strong quality characteristics of our PAMC product and focused our sales efforts on stronger export market opportunities, particularly in the industrial and crossover metallurgical markets. Export sales in aggregate accounted for 60% of our total coal revenue during 3Q23 with 38% of total coal revenue coming from the export industrial market and 14% from export metallurgical sales. On a year-to-date basis, 71% of our total recurring revenues and other income1 have been derived from sales into the export markets.
Furthermore, during 3Q23, we strengthened our forward…
Read More: CONSOL Energy Announces Results for the Third Quarter 2023