Core Natural Resources, Inc. Q1 FY2025 earnings call

• Core had a strong start as a combined company, generating $123.5 million of adjusted EBITDA in Q1 despite a soft market. - Returned $106.6 million to investors through share buybacks and dividends. - Increased merger-related synergies target to between $125 million and $150 million. - Made progress on resuming operations at Leer South, with the team safely sealing off affected areas and resuming development work. - Implemented a capital return program, repurchasing 1.4 million shares for $101 million and paying dividends. - Achieved progress on synergy capture, with expected annual synergies between $125 million and $150 million. - Addressed global market dynamics, noting soft international conditions but opportunities in domestic markets and certain international segments.

During the first quarter, the high CV thermal segment generated substantial free cash flow, with adjusted EBITDA of $123.5 million. The full year cash cost for this segment is projected at the midpoint of guidance to be $39 per ton, which is more than $3 per ton lower than in Q1. The Metallurgical segment faced challenging market conditions but had solid cost performance, with record quarterly production at the Leer mine. The cash cost for the Metallurgical segment is projected at the midpoint of guidance to be $96 per ton, with the back half of the year expecting cash cost in the lower $90 per ton range. The PRB segment sold 10.7 million tons in Q1 with a realized coal revenue per ton sold of $14.93 and cash cost of $12.44 per ton.

• Full year cash cost for high CV thermal segment projected at midpoint $39 per ton. - Metallurgical segment cash cost projected at midpoint $96 per ton, with back half of year expecting lower $90s. - PRB segment sales volume guidance increased by 2.5 million tons at midpoint to 39 million to 42 million tons. - High CV thermal segment committed tonnage position improved to approximately 87% of tons contracted at midpoint of guidance range.

• Trade-related uncertainties impacting international markets for both metallurgical and high CV thermal coal. - Regulatory pressure on mine output globally affecting supply. - Potential impact of tariffs on Metallurgical segment demand. - Unknowns with Leer South restart such as electronics issues in the longwall equipment.

Q: A couple questions on the Met segment, clarifying adjusted EBITDA and cost performance.

A: Mitesh Thakkar addressed that idling costs were not added back to adjusted EBITDA, and Paul Lang discussed Q1 performance and Q2 expectations for the Met segment.

Q: On capital return, questions about buybacks exceeding free cash flow.

A: Mitesh Thakkar stated they target returning ~75% of free cash flow and would opportunistically deploy cash.

Q: On Leer South, timeline and next steps.

A: Paul Lang explained the timeline for re-entering the mine, ventilation setup, and expected progress after re-entry.

Q: On longwall development and synergy.

A: Paul Lang and Mitesh Thakkar discussed longwall development progress and synergy capture progress, including blending and administrative synergies.