Core Natural Resources Reports First Quarter 2025 Results
- Increased merger synergies target by 10% to $125-150 million annually
- Strong capital return program with $106.6 million returned to shareholders via buybacks and dividends
- Solid liquidity position of $858.3 million with $388.5 million in cash
- Successfully refinanced tax-exempt bonds with improved terms and lower interest rates
- High c.v. thermal segment has 26 million tons committed and priced at $61-63 per ton for 2025
- Reported net loss of $69.3 million in Q1 2025
- Leer South mine longwall operations temporarily suspended due to combustion-related event
- Facing softer market conditions in international arena due to trade-related uncertainties
- Higher than expected cash cost of coal sold in thermal segment due to three longwall moves
Insights
Despite Q1 net loss, Core Natural Resources shows strong underlying performance with substantial shareholder returns and positive operational momentum.
Core Natural Resources reported a net loss of $69.3 million ($1.38 per diluted share) for Q1 2025, though this figure includes $49.2 million in merger-related expenses and $11.7 million from debt extinguishment. When adjusting for these one-time items, the company delivered adjusted EBITDA of $123.5 million on revenues of $1,017.4 million.
The company's capital return program is particularly aggressive, with $101.3 million returned via share repurchases (1.4 million shares at $73.52 average) plus a $0.10 quarterly dividend. This represents approximately 3% of outstanding shares repurchased in a short timeframe, signaling management's confidence in business fundamentals despite current market challenges.
Core's integration efforts following the January merger are progressing well, with synergy targets increased by 10% to $125-150 million annually. This upward revision suggests consolidation benefits are exceeding initial projections.
Operationally, the high calorific value thermal segment performed strongly with revenues of $63.18 per ton against costs of $42.78 per ton, creating substantial margins despite three longwall moves during the quarter. The metallurgical segment faced headwinds from the Leer South outage but maintained relatively stable unit economics with coking coal revenues of $113.70 per ton.
The company's $858.3 million total liquidity position, including $388.5 million in cash, provides substantial flexibility. Recent refinancing efforts have strengthened the balance sheet by extending maturities and reducing interest rates, positioning Core to weather ongoing market volatility while continuing shareholder returns.
Looking ahead, the expected mid-year resumption of Leer South's longwall operations should significantly improve metallurgical segment production volumes and unit costs in H2 2025. The company projects metallurgical cash costs to drop to the low $90s per ton in the second half, which would enhance margins if current pricing holds.
While international coal markets remain challenging, Core's substantial contracted position - with 26 million tons of high-CV thermal coal committed at $61-63 per ton - provides revenue visibility for 2025. The company's confident outlook is reflected in its maintained or enhanced full-year guidance across all metrics.
Returns
Increases merger-related synergies target by
Makes excellent progress towards full resumption of operations at Leer South
Executes well-timed capital market transactions establishing target capital structure while boosting liquidity, extending maturities, reducing interest rates, and increasing financial flexibility
"Since completing the merger on January 14, Core has made exceptional progress in integrating the operating portfolio and beginning to unlock the tremendous potential of the new company," said Paul A. Lang, Core's chief executive officer. "To date, the Core team has launched and executed upon a powerful capital return program; put in place strategies expected to deliver the previously identified synergies while increasing the targeted range by 10 percent; and further tightened the alignment between its two core lines of business – global metallurgical and high calorific value thermal coals."
"Importantly, the Core team is already executing at a high level operationally, driven by a strong performance by the high c.v. thermal segment," Lang said. "Even with the uncertain global trade environment, the high c.v. thermal segment leveraged its strong book of contracted business, strengthening
As indicated, Core also made excellent progress on its recently adopted capital return program, returning a total of
Leer South Update
In mid-January 2025, Core announced that it was temporarily sealing Leer South's active longwall panel to extinguish isolated combustion-related activity. Since that time, the Leer South team – in close collaboration with federal and state regulators – has safely sealed the affected area, extinguished all combustion-related activity, resumed development work with continuous miner units, and completed a remote assessment of the mine's longwall system, which solidified the company's belief that the longwall equipment was largely unaffected by the event.
"On behalf of the board and the entire senior management team, I want to again commend the operations team as well as federal and state regulators for their exceptional, ongoing work in managing this situation in a safe and efficient manner," Lang said. "We continue to make substantial progress on all fronts and remain on track to resume longwall production by mid-year, in keeping with our originally indicated timeline. Notably, development work at the mine – which resumed in February with the restart of continuous miner units – is progressing at a strong pace and acting to greatly increase the development lead time for future longwall production. We expect that increase to translate into higher longwall productivity once longwall operations resume."
Synergy Update
As indicated, Core has increased its targeted range for synergy creation by 10 percent at the midpoint to
"In the first four months since the merger's completion, the Core team has made tremendous progress in integrating the operating portfolio and unlocking the value of the already identified synergies, while setting its sights on additional value creation via further streamlining, cost reduction, efficiency improvement, and product optimization efforts," Lang said. "On top of the announced increase in our targeted range, we expect additional uplift in the synergy arena as coal markets normalize, which is expected to act to further increase incremental value in areas such as marketing and product blending."
Operational Update
During the first quarter of 2025, Core's high c.v. thermal coal segment had sales volumes of 7.1 million tons despite the fact that three of the PAMC's five scheduled longwall moves for 2025 occurred in Q1 2025. Moreover, it achieved realized coal revenue per ton sold1 of
The metallurgical segment turned in a solid performance in Q1 in light of the longwall outage at Leer South, with total Q1 sales volumes of 2.3 million tons. The segment had coking coal sales of 1.9 million tons and thermal byproduct sales of 0.4 million tons, achieving realized coal revenue per ton sold1 for coking coal of
As indicated, the Leer South longwall was idle during the first quarter of 2025 due to the previously announced combustion-related event, but the mine remains on track to resume longwall operations mid-year. This should act to boost the segment's sales volumes and lower its unit costs markedly in the second half of 2025. Core is guiding to a cash cost of coal sold per ton2 for the metallurgical segment in the low
Financial and Liquidity Update
At March 31, 2025, Core had total liquidity of
In February 2025, Core announced a new capital return framework targeting the return to stockholders of around 75 percent of free cash flow1, with the significant majority of that return directed to share repurchases complemented by a sustaining quarterly dividend of
In addition, and in keeping with the recently announced structure of its capital return program, Core's board of directors has declared a
"During the quarter, we executed on several capital market transactions that not only helped establish our target capital structure but also bolstered our liquidity, extended maturities, and added significant financial flexibility to execute our capital return program," said Mitesh Thakkar, Core's president and chief financial officer. "While the commodity markets are volatile, we are in an excellent position to opportunistically deploy our significant cash balances towards the capital return program given our expectations of strong free cash flow1 generation from our contracted book of business and low-cost asset base."
As of March 31, 2025, Core had
As previously announced, in connection with the closing of the merger, Core extended its revolving credit facility, upsizing the facility commitments to
"These successful refinancing efforts serve to underscore the strength of Core's operating portfolio; the value of its greatly enhanced diversification and scale; and the power of its substantial cash-generating capabilities across a wide range of market environments," Thakkar said. "With the refinancing of the tax-exempt bonds, which represent the vast majority of Core's debt, we believe we have built a smart and strategic capital structure that furnishes tremendous financial flexibility while supporting the company's long-term growth prospects."
Market Dynamics
Core's two principal lines of business – metallurgical coal and high calorific value thermal coal – continue to navigate softer market conditions in the international arena, where trade-related uncertainties continue to weigh on markets.
In the high calorific value thermal segment, Core's substantial contracted position – at relatively advantageous pricing – is acting to counterbalance current export market softness, as is continued stability in key industrial market segments and strong domestic demand. At present, the high c.v. thermal segment has a committed and priced position – inclusive of select collared volumes – of approximately 26 million tons at a projected price of between
Despite currently weak pricing levels, long-term market dynamics for Core's metallurgical segment remain highly promising. New blast furnace capacity continues to come online across
Outlook
"The Core team is off to an excellent start in integrating the combined operating, marketing and logistics portfolio into a cohesive, high-performing unit; capturing the substantial – and growing – synergies created by this transformational merger; and laying the foundation for long-term value creation via the tight alignment of its global metallurgical and high calorific value thermal segments," Lang said. "We believe we are building a company that is uniquely equipped to capitalize on compelling global coal market dynamics – with our world-class mines, highly strategic logistical network, strong balance sheet, tremendous cash-generating capabilities, and – most importantly – exceptionally talented workforce that embraces our core values of safety, compliance, and continuous improvement. As we look ahead, we expect to continue to generate substantial levels of free cash flow1 – particularly in the year's second half – and to continue to return significant amounts of cash to stockholders via our compelling capital return program."
As detailed in the 2025 Guidance table below, Core either affirmed or enhanced its full-year guidance in all instances.
1 - Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures and Realized Coal Revenue per Ton Sold and Cash Cost of Coal Sold per Ton are operating ratios derived from non-GAAP financial measures, each of which are reconciled to the most directly comparable GAAP financial measures below, under the caption "Reconciliation of Non-GAAP Financial Measures".
2 - Core is unable to provide a reconciliation of Metallurgical Cash Cost of Coal Sold per Ton, which is an operating ratio derived from non-GAAP financial measures, without unreasonable efforts due to the unknown effect, timing and potential significance of certain income statement items.
2025 Guidance | |||||
2025 | |||||
Tons | $ per ton | ||||
Sales Volume (in millions of tons) | |||||
Coking1 | 7.5 | - | 8.0 | ||
High C.V. Thermal2 | 29.0 | - | 31.0 | ||
Powder River Basin | 39.0 | - | 42.0 | ||
Total | 75.5 | 81.0 | |||
Metallurgical (in millions of tons) | |||||
Committed, Priced Coking | 2.9 | $ 122.38 | |||
Committed, Unpriced Coking | 4.3 | ||||
Total Committed Coking | 7.2 | ||||
Metallurgical Cash Cost of Coal Sold per Ton3 | |||||
High C.V. Thermal (in millions of tons) | |||||
Committed, Priced4 | 26.0 | ||||
Committed, Unpriced | 0.5 | ||||
Total Committed High C.V. Thermal | 26.5 | ||||
High C.V. Thermal Cash Cost of Coal Sold per Ton | |||||
Powder River Basin (in millions of tons) | |||||
Committed, Priced | 41.9 | $ 14.77 | |||
Committed, Unpriced | 0.0 | ||||
Total Committed Powder River Basin | 41.9 | ||||
Powder River Basin Cash Cost of Coal Sold per Ton | |||||
Corporate (in $ millions) | |||||
Capital Expenditures | |||||
1 - Excludes thermal byproduct |
2 - Includes crossover volumes |
3 - Metallurgical cash cost of coal sold per ton in the second half of 2025 — after the projected restart of the Leer South longwall — is projected to be in the low |
4 - Range reflects inclusion of collared commitments |
Note - Core is unable to provide a reconciliation of Metallurgical Cash Cost of Coal Sold per Ton, High C.V. Thermal Cash Cost of Coal Sold per Ton and Powder River Basin Cash Cost of Coal Sold per Ton guidance, which are operating ratios derived from non-GAAP financial measures, without unreasonable efforts due to the unknown effect, timing and potential significance of certain income statement items. |
Availability of Additional Information
Please refer to our website, www.corenaturalresources.com, for additional information regarding the company. In addition, we may provide other information about the company from time to time on our website.
We will also file our Quarterly Report on Form 10-Q ("Form 10-Q") with the Securities and Exchange Commission ("SEC") reporting our results for the quarterly period ended March 31, 2025 on May 8, 2025. Investors seeking our detailed financial statements can refer to the Form 10-Q once it has been filed with the SEC.
About Core Natural Resources, Inc.
Core Natural Resources, Inc. (NYSE: CNR) is a world-class producer and exporter of high-quality, low-cost coals, including metallurgical and high calorific value thermal coals. The company operates a best-in-sector portfolio, including the Pennsylvania Mining Complex, Leer, Leer South, and West Elk mines. With a focus on seaborne markets, Core plays an essential role in meeting the world's growing need for steel, infrastructure, and energy, and has ownership interests in two marine export terminals. The company was created in January 2025 via the merger of long-time industry leaders CONSOL Energy and Arch Resources and is based in
Reconciliation of Non-GAAP Financial Measures
We define realized coal revenue as revenues reported in the Consolidated Statements of Income less transportation costs, transloading revenues and other revenues not directly attributable to coal sales. We define realized coal revenue per ton sold as realized coal revenue divided by tons sold. The following table presents a reconciliation by reportable segment of realized coal revenue and realized coal revenue per ton sold to revenues, the most directly comparable GAAP financial measure, on a historical basis, for the three months ended March 31, 2025 (in thousands, except per ton information).
Three Months Ended March 31, 2025 | |||||||||||
High CV | Metallurgical | PRB |
| Idle, Other | Consolidated | ||||||
Revenues | $ 542,086 | $ 304,580 | $ 162,589 | $ 21,226 | $ (13,075) | $ 1,017,406 | |||||
Less: Adjustments to | |||||||||||
Transportation Expense | 93,729 | 76,982 | 2,740 | — | — | 173,451 | |||||
Terminal Revenues | — | — | — | 21,226 | (16,270) | 4,956 | |||||
Other Revenues | — | — | — | — | 3,195 | 3,195 | |||||
Non-GAAP Segment | $ 448,357 | $ 227,598 | $ 159,849 | $ — | $ — | $ 835,804 | |||||
Tons Sold | 7,097 | 2,316 | 10,707 | ||||||||
Realized Coal Revenue per | $ 63.18 | $ 98.26 | $ 14.93 | ||||||||
The following table presents a breakdown of the realized coal revenue per ton sold for the metallurgical segment between coking coal and thermal byproduct for the three months ended March 31, 2025 (in thousands, except per ton information).
Three Months Ended March 31, 2025 | |||||
Coking Coal | Thermal Byproduct | Total Metallurgical | |||
Non-GAAP Segment Realized Coal Revenue | $ 213,082 | $ 14,516 | $ 227,598 | ||
Tons Sold | 1,874 | 442 | 2,316 | ||
Realized Coal Revenue per Ton Sold | $ 113.70 | $ 32.83 | $ 98.26 | ||
We evaluate our cash cost of coal sold on an aggregate basis by segment and our cash cost of coal sold per ton on a per-ton basis. Cash cost of coal sold includes items such as direct operating costs, royalty and production taxes and direct administration costs, and excludes transportation costs, indirect costs, other costs not directly attributable to the production of coal and depreciation, depletion and amortization costs on production assets. We define cash cost of coal sold per ton as cash cost of coal sold divided by tons sold.
The following table presents a reconciliation by reportable segment of cash cost of coal sold and cash cost of coal sold per ton to cost of sales, the most directly comparable GAAP financial measure, on a historical basis, for the three months ended March 31, 2025 (in thousands, except per ton information).
Three Months Ended March 31, 2025 | |||||||||||
High CV | Metallurgical | PRB |
| Idle, Other | Consolidated | ||||||
Cost of Sales | $ 397,290 | $ 324,163 | $ 135,898 | $ 7,825 | $ 5,120 | $ 870,296 | |||||
Less: Adjustments to | |||||||||||
Transportation Costs | 93,729 | 76,982 | 2,740 | — | (16,270) | 157,181 | |||||
Cost of Sales from Idled | — | 36,406 | — | — | 4,644 | 41,050 | |||||
Terminal Operating Costs | — | — | — | 7,825 | — | 7,825 | |||||
Other (Operating Overhead, | — | — | — | — | 16,746 | 16,746 | |||||
Non-GAAP Segment Cash | $ 303,561 | $ 210,775 | $ 133,158 | $ — | $ — | $ 647,494 | |||||
Tons Sold | 7,097 | 2,316 | 10,707 | ||||||||
Cash Cost of Coal Sold per | $ 42.78 | $ 91.00 | $ 12.44 | ||||||||
We define adjusted EBITDA as (i) net income (loss) plus income taxes, net interest expense and depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as stock-based compensation and loss on debt extinguishment and (iii) certain one-time transactions, such as merger-related expenses. Adjusted EBITDA may also be adjusted for items that may not reflect the trend of future results by excluding transactions that are not indicative of our operating performance or that arise outside of the ordinary course of our business.
The following table presents a reconciliation by reportable segment of adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, on a historical basis, for the three months ended March 31, 2025 (in thousands).
Three Months Ended March 31, 2025 | |||||||||||
High CV | Metallurgical | PRB |
| Other, | Consolidated | ||||||
Net Income (Loss) | $ 93,506 | $ (65,472) | $ 15,911 | $ 12,022 | $ (125,244) | $ (69,277) | |||||
Income Tax Benefit | — | — | — | — | (4,216) | (4,216) | |||||
Interest Expense, net | — | — | — | — | 1,701 | 1,701 | |||||
Depreciation, Depletion and | 51,290 | 45,889 | 10,780 | 1,379 | 12,218 | 121,556 | |||||
Stock-Based Compensation | — | — | — | — | 12,859 | 12,859 | |||||
Merger-Related Expenses | — | — | — | — | 49,182 | 49,182 | |||||
Loss on Debt Extinguishment | — | — | — | — | 11,680 | 11,680 | |||||
Adjusted EBITDA | $ 144,796 | $ (19,583) | $ 26,691 | $ 13,401 | $ (41,820) | $ 123,485 | |||||
Free cash flow is a non-GAAP financial measure, defined as net cash provided by (used in) operating activities plus proceeds from sales of assets and unrestricted cash proceeds from the Merger with Arch Resources, Inc., less capital expenditures and investments in mining-related activities. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations and non-core asset sales after taking into consideration capital expenditures due to the fact that these expenditures are considered necessary to maintain and expand the company's asset base and are expected to generate future cash flows from operations. It is important to note that free cash flow does not represent the residual cash flow available for discretionary expenditures, since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure. The following table presents a reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP financial measure, on a historical basis, for the three months ended March 31, 2025 (in thousands).
Three Months | |
March 31, 2025 | |
Net Cash Used in Operating Activities | $ (109,638) |
Capital Expenditures | (64,822) |
Proceeds from Sales of Assets | 6,003 |
Unrestricted Cash Proceeds from Merger | 217,593 |
Free Cash Flow | $ 49,136 |
Cautionary Statement Regarding Forward-Looking Statements
This communication contains certain "forward-looking statements" within the meaning of federal securities laws. Forward-looking statements may be identified by words such as "anticipate," "believe," "could," "continue," "estimate," "expect," "intend," "will," "should," "may," "plan," "predict," "project," "would" and similar expressions. Forward-looking statements are not statements of historical fact and reflect Core's current views about future events. No assurances can be given that the forward-looking statements contained in this communication will occur as projected, and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, without limitation, deterioration in economic conditions (including continued inflation) or changes in consumption patterns of our customers may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; volatility and wide fluctuation in coal prices based upon a number of factors beyond our control; an extended decline in the prices we receive for our coal affecting our operating results and cash flows; significant downtime of our equipment or inability to obtain equipment, parts or raw materials; decreases in the availability of, or increases in the price of, commodities or capital equipment used in our coal mining operations; our reliance on major customers, our ability to collect payment from our customers and uncertainty in connection with our customer contracts; our inability to acquire additional coal reserves or resources that are economically recoverable; alternative steel production technologies that may reduce demand for our coal; the availability and reliability of transportation facilities and other systems that deliver our coal to market and fluctuations in transportation costs; a loss of our competitive position; foreign currency fluctuations that could adversely affect the competitiveness of our coal abroad; the risks related to the fact that a significant portion of our production is sold in international markets (and may grow) and our compliance with export control and anti-corruption laws; coal users switching to other fuels in order to comply with various environmental standards related to coal combustion emissions; the impact of current and future regulations to address climate change, the discharge, disposal and clean-up of hazardous substances and wastes and employee health and safety on our operating costs as well as on the market for coal; the risks inherent in coal operations, including being subject to unexpected disruptions caused by adverse geological conditions, equipment failure, delays in moving out longwall equipment, railroad derailments, security breaches or terroristic acts and other hazards, delays in the completion of significant construction or repair of equipment, fires, explosions, seismic activities, accidents and weather conditions; failure to obtain or renew surety bonds or insurance coverages on acceptable terms; the effects of coordinating our operations with oil and natural gas drillers and distributors operating on our land; our inability to obtain financing for capital expenditures on satisfactory terms; the effects of our securities being excluded from certain investment funds as a result of environmental, social and corporate governance practices; the effects of global conflicts on commodity prices and supply chains; the effect of new or existing laws or regulations or tariffs and other trade measures; our inability to find suitable joint venture partners or acquisition targets or integrating the operations of future acquisitions into our operations; obtaining, maintaining and renewing governmental permits and approvals for our coal operations; the effects of asset retirement obligations, employee-related long-term liabilities and certain other liabilities; uncertainties in estimating our economically recoverable coal reserves; defects in our chain of title for our undeveloped reserves or failure to acquire additional property to perfect our title to coal rights; the outcomes of various legal proceedings; the risk of our debt agreements, our debt and changes in interest rates affecting our operating results and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; the potential failure to retain and attract qualified personnel of the Company; failure to maintain effective internal controls over financial reporting; uncertainty with respect to the Company's common stock, potential stock price volatility and future dilution; uncertainty regarding the timing and value of any dividends we may declare; uncertainty as to whether we will repurchase shares of our common stock; inability of stockholders to bring legal action against us in any forum other than the state courts of
All such factors are difficult to predict, are beyond Core's control, and are subject to additional risks and uncertainties, including those detailed in Core's annual report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q, and current reports on Form 8-K that are available on Core's website at www.corenaturalresources.com and on the SEC's website at http://www.sec.gov.
Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Core does not undertake any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
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SOURCE Core Natural Resources
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