Matthew Mark Trims His Stake In SunCoke Energy Inc. (SXC) ~ Will SunCoke Get Back On Track?

This MPL was intended to enhance the value of SunCoke Energy’s business and provide the company additional financial flexibility. However, it seems that the company has not been quite successful in delivering value for shareholders through the aforementioned MLP. To be more specific, the management of SunCoke has been criticized for not being able to use its general partner structure, which assumes the role of overseeing the MPL’s operations, to create value. As a result, Matthew Mark’s Jet Capital Investors suggested SunCoke consider alternative means of selling the company to a third party that will allow it to unlock shareholder value from its role as a general partner of SunCoke Energy Partners. Matthew Mark also pointed out that the management of SunCoke has been sluggish in dropping down its assets to the MPL due to different views of the two entities on the fair value of SunCoke’s coke assets. Therefore, the slow pace of the dropdowns has had a negative impact on the share prices of both SunCoke and its MLP. To sum up, SunCoke has been facing struggles recently, while Jet Capital Investors has pinpointed these issues and has publicly divulged the steps SunCoke should follow in order to get back on track. Therefore, the future performance of SunCoke Energy is within its control, so sooner or later the necessary steps may be completed and the stock might achieve its much needed turnaround.

The fact that SunCoke Energy has entered choppy waters is also reflected in its financial performance.  The company reported a loss of $13.5 million or $0.21 per share for the second quarter of 2015 that ended June 30, compared to a net loss of $49.2 million or $0.71 per share reported in the same quarter a year ago. SunCoke Energy also reported adjusted EBITDA of $33.4 million, declining by $27.4 million year-over-year. At the same time, the company’s revenues declined by $24.0 million year-over-year to a figure of $348.2 million. The analysts’ expectations on the company’s earnings and revenues figures have not been reached as well, which indicates that SunCoke has been underperforming in the eyes of outside observers. However, appropriate changes within the company’s strategic direction might put the company back on track. It is worth mentioning that the shares of SunCoke decreased by over 36% year-to-date. Within our database, Richard Rubin’s Hawkeye Capital is among the largest investors in SunCoke Energy Inc. (NYSE:SXC), holding nearly 2.71 million shares as of March 31.

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