SunCoke Energy, Inc. (NYSE: SXC) reported a net loss for the fourth quarter and full year of 2025, primarily driven by significant non-cash impairment charges and costs associated with the closure of its Haverhill I facility. Despite these headwinds, the company achieved its revised 2025 Adjusted EBITDA objectives and issued a positive outlook for 2026, citing the integration of the Phoenix Global acquisition as a primary growth driver.
Strategic Acquisition Offsets Operational Challenges
The defining development for SunCoke in the latter half of 2025 was the completion of the Phoenix Global acquisition on August 1. This transaction has fundamentally reshaped the company’s Industrial Services segment, contributing five months of financial results to the 2025 fiscal year. Management indicated that the integration is progressing as planned, with further synergies expected to be realized through 2026 and 2027.
However, the Domestic Coke segment faced substantial disruption due to a breach of contract by Algoma Steel. This legal and operational conflict led to the decision to shutter the Haverhill I cokemaking facility, resulting in lower sales volumes and significant one-time charges.
Quarterly and Annual Financial Performance
SunCoke’s financial performance for the period ending December 31, 2025, reflected the impact of asset impairments and shifting contract dynamics.
Net Income/Loss: The company reported a Q4 2025 diluted loss per share of $1.00, compared to earnings of $0.28 in Q4 2024. For the full year, the loss per share was $0.52, down from a profit of $1.12 in 2024.
Adjusted EBITDA: Consolidated Adjusted EBITDA for Q4 2025 was $56.7 million, a decrease from $66.1 million in the prior-year period. Full-year 2025 Adjusted EBITDA reached $219.2 million, meeting the company’s guidance but falling short of the $272.8 million recorded in 2024.
Operating Cash Flow: Net cash provided by operating activities totaled $109.1 million for FY 2025, down from $168.8 million in the previous year.
Year-over-Year Comparative Data
Metric (Consolidated)
FY 2024
FY 2025
Change
Domestic Coke Sales (Kt)
3,668
4,028
+360
Terminals Handling Volumes (Kt)
22,540
20,320
-2,220
Adjusted EBITDA ($M)
$272.8
$219.2
-$53.6
Diluted EPS ($)
$1.12
($0.52)
-$1.64
2026 Business Outlook and Strategy
SunCoke issued 2026 Adjusted EBITDA guidance in the range of $230 million to $250 million, representing a projected increase over 2025 levels. This growth is expected to be fueled by a full year of contributions from Phoenix Global and an anticipated recovery in terminal handling volumes.
The company’s 2026 strategy focuses on several key pillars:
Deleveraging: Management expects to utilize free cash flow for debt paydown, targeting a gross leverage ratio below 3.0x by the end of 2026.
Contract Stability: SunCoke secured a three-year contract extension with Cleveland-Cliffs at the Haverhill II facility and extended its Granite City agreement through the end of 2026.
Asset Optimization: Following the closure of Haverhill I, the company is focusing on operating its remaining coke fleet at full utilization.
Sector and Macro Context
The broader steel and cokemaking industry remains influenced by fluctuating demand and shifting supply chain requirements. SunCoke’s pivot toward expanded industrial services through Phoenix Global reflects a move to diversify revenue streams beyond traditional coke production. While the Domestic Coke segment remains the core profit center, the Industrial Services segment is expected to contribute approximately $90 million to $100 million in Adjusted EBITDA for 2026, assuming improved market conditions.
Executive leadership emphasized that despite the “slow start to 2026” caused by severe winter weather and a turbine failure at the Middletown facility, the company remains committed to its balanced capital allocation strategy. This includes maintaining the current quarterly dividend of $0.12 per share while prioritizing the integration of new assets.
Reasons to Pass on SXC
Reported net losses: Posted a Q4 2025 diluted loss per share of $1.00 versus earnings of $0.28 in Q4 2024; full-year 2025 EPS was a loss of $0.52 compared to a profit of $1.12 in 2024.
Significant impairment and closure charges: Results were materially impacted by non-cash impairment charges and costs related to the shutdown of the Haverhill I facility.
Lower year-over-year profitability: Full-year 2025 Adjusted EBITDA declined to $219.2 million from $272.8 million in 2024.
Quarterly EBITDA contraction: Q4 2025 Adjusted EBITDA fell to $56.7 million from $66.1 million in the prior-year quarter.
Decline in operating cash flow: FY 2025 operating cash flow decreased to $109.1 million from $168.8 million in 2024.
Terminal volume weakness: Terminals handling volumes declined year over year, indicating softer throughput activity.
Contract disruption risk: A breach of contract by Algoma Steel led to operational disruption and the closure of Haverhill I, highlighting customer concentration and contract risk.
Execution and integration risk: Growth expectations for 2026 are dependent on the successful integration and synergy realization from the Phoenix Global acquisition.
Leverage reduction dependent on cash flow: Deleveraging targets rely on sustained free cash flow generation amid operational headwinds.
Industry cyclicality exposure: Performance remains sensitive to steel market demand and broader macroeconomic conditions.
Operational disruptions entering 2026: Severe winter weather and a turbine failure at the Middletown facility contributed to a slow start to the year.
The post SunCoke Energy Reports Q4 and FY2025 Net Loss on Impairment Charges, Issues 2026 EBITDA Outlook first appeared on AlphaStreet News.
