Warrior Met Coal, Inc. Q1 FY2026 earnings call

• First quarter marked completion of Blue Creek Mines construction, ahead of schedule and on budget. • New Blue Creek mine contributed to higher volumes and profitability in first quarter. • Premium quality pricing strong due to supply constraints in Australia, but high vol A quality segment underperformed. • Steelmaking coal prices strong despite soft seaborne demand. • India key market for high-quality steelmaking coal. • PLV FOB Australia index rose in first quarter. • Australian LVHCC index price had more modest gains. • U.S. East Coast HVA index price increase was smaller. • Warrior achieved record high quarterly sales volume in first quarter. • Capital expenditures and mine development spending lower in first quarter compared to fourth quarter 2025. • SG&A expenses higher in first quarter 2026 due to higher employee-related expenses. • Depreciation and depletion expenses higher in first quarter 2026 due to additional assets and higher sales volume.

In the first quarter, the new Blue Creek mine was a major contributor to higher volumes and profitability. Total project capital expenditures were a little over a billion dollars, on budget and paid from cash operations. First quarter volumes were higher than internal plans. Sales volume was a record high 3 million short tons, a 38% increase from the same quarter of 2025. Adjusted EBITDA in first quarter 2026 was $143 million, 54% higher than fourth quarter 2025. Net income in first quarter 2026 was $72 million or $1.37 per diluted share compared to a net loss of $8 million or 16 cents per diluted share in the same quarter of 2025. Total revenues were $459 million in first quarter 2026, compared to $300 million in the same quarter of 2025. Cash cost of sales per short-time FOB report was approximately $96 in first quarter 2026, compared to $112 in the same quarter last year. Cash margins per short-time increased 127% to $53 in first quarter from $23 in the same quarter of last year. Sales mix was 61% high vol A, 11% higher than fourth quarter 2025. Sales by geographies: 51% into Asia, 25% into Europe, 14% into South America. Spot volume was 6% for first quarter 2026. Production volume was a record high 3.5 million short tons, 55% increase from same quarter last year. Coal inventory levels increased to 1.9 million short tons at end of March 2026.

• Expect steelmaking coal markets to remain generally consistent with recent trends absent major disruptions. • First quarter results on track with full-year expectations, so reaffirming full-year 2026 outlook and guidance. • May face inflationary cost pressures on materials, supplies, diesel fuel, tariffs, and shipping costs, but potential impacts outweighed by higher production due to European protectionist measures and rising steel prices. • Expect steelmaking coal prices to remain above 2025 average levels absent material changes in supply and demand. • Warrior will continue to execute strategy to optimize production, control costs, and generate free cash flow.

• Uncertainty from Middle East conflict and its effect on global economy, full impact not quantifiable. • Inflationary cost pressures on materials, supplies, diesel fuel, tariffs, and shipping costs, difficulty in quantifying four-year impact on cash cost. • Disruptions in supply or demand could impact steelmaking coal markets.

Q: How much of the working capital build could unwind in the second quarter and cash flow balance sheet implications for the 45x production tax credit?

A: Dale said it's hard to predict exactly, large portion will come back, not sure will be back to break even year-to-date through first half. 45X credit was worth about $8.4 million or $3 a ton for the quarter.

Q: Speak to diesel usage across operating platform and sensitivity?

A: Warrior doesn't do much trucking of coal, not high diesel usage, no projection as oil prices and pass-throughs uncertain, working hard to mitigate.

Q: How inventories could unwind and mix?

A: Sales projections for Blue Creek ahead of schedule, production levels higher than expected, will gradually decline over next few quarters, mostly Blue Creek product.

Q: Volume shipped to Pacific Basin, percentage on CFR basis and current freight cost?

A: All of the 60% shipped to Pacific Basin is on CFR basis, freight rates averaging much higher, upper 40s for quarter so far.

Q: Priorities for free cash flow and shareholder returns going forward, form of returns?

A: Once generating cash, will look to provide more shareholder returns, likely rising fixed quarterly dividend supplemented by special dividends and selected stock buybacks.

Q: Impact of Section 303 determination?

A: Walt thinks things will continue as today, no significant changes, so no major impact.