Warrior Met Coal — Financial Results

Earnings Collapsed as Coal Prices Fell Nearly 30%

The average net selling price per metric ton dropped $61.12 (29.5%) year-over-year, driven by depressed global steel demand, record Chinese steel exports, and abundant coal supply. That price decline wiped out $533.9 million in revenue, which record sales volumes only partially offset. Net income fell from $250.6 million to $57.0 million — a drop of roughly 77% in two years.

Record Production Volumes Cushioned the Blow from Weak Prices

The company set new records for both sales and production, largely because the new Blue Creek mine contributed 1.8 million metric tons in its first partial year. The extra volume added roughly $311 million in revenue, softening — but not reversing — the damage from lower prices.

Blue Creek Mine Launched Eight Months Early, Cutting Costs

Cash cost of sales per metric ton fell from $138.10 to $111.66 (a 19% reduction), primarily because Blue Creek operates at an inherently lower cost than the existing mines. The company spent $240.3 million on Blue Creek in 2025, bringing the total project spend to $956.8 million against a final budget of $995 million to $1.075 billion. With longwall operations now running, capital spending is expected to drop sharply — from $402 million in 2025 to $155–$215 million in 2026.

Production Capacity Nearly Doubled on Paper — But Markets Will Decide Output

The company upgraded Blue Creek's nameplate production capacity (the theoretical maximum it could produce) by 25%, from 4.4 million to 5.4 million metric tons annually, and with further additions potentially to 6.4 million. Combined with existing mines, total nameplate capacity rises from 7.3 to as much as 13.7 million metric tons per year — an 88% increase. Management was careful to note actual output will depend on market conditions, not just capacity.

Cash Position Declining but Liquidity Remains Solid

Cash fell by $191 million during the year as heavy Blue Creek investment continued. However, the company carries no borrowings on its revolving credit facility and management states it has sufficient resources for at least the next twelve months. With major construction nearly complete, the cash burn from Blue Creek investment should ease significantly in 2026.

New Tax Law Could Provide a Meaningful Boost

The One, Big, Beautiful Bill Act enacted in July 2025 classified metallurgical coal as a critical mineral, making it eligible for a 2.5% production tax credit through 2029. The law also provides a permanent 33.34% deduction on foreign-derived income (reducing the effective tax rate on export sales to 14%) and temporarily caps federal coal royalty rates at 7% through 2034. The company is still assessing the full impact, but these provisions could reduce the tax burden and lower operating costs on federally leased land.