SunCoke Energy, Inc. (NYSE:SXC) Q3 2023 Earnings Call Transcript

Shantanu Agrawal: It’s mostly coal. Yes. I mean, Nate, I mean on the CMT side, most of the variability comes from the coal side. The ancillary business is kind of more or less stable from a quarter-to-quarter basis. And obviously, it comes from what the demand is and that is kind of reflected in the API2 pricing which drives the demand of the coal. So most of the variability comes from the coal.

Nathan Martin: Okay. Got it. Very helpful. And then maybe just 1 last kind of modeling question for me. CapEx, Mark mentioned it was $34 million in the third quarter. I think that’s what’s your year-to-date spend already about $85 million, you maintain guidance of $95 million. It’s a pretty big fall off, I guess, in the fourth quarter, roughly $10 million. Is it the right way to think about it or am I missing something?

Katherine Gates: No, that’s the right way to think about it. I mentioned earlier that we have our own planned outages at our coke plants and those are really higher O&M. They’re not CapEx heavy. So that’s really what we’re — that’s what we’re seeing in the fourth quarter. So it’s — we’re low on CapEx there but what we have seen is that we’ve seen the inflationary pressures related to our maintenance CapEx and that’s throughout the year. We actually have some nominal capital spend on preliminary engineering work on the GPI project as well. So both that inflationary pressure and the GPI project was not anticipated at the time that we gave our CapEx guidance. So we actually anticipate CapEx coming in slightly above our guidance of the $95 million.

Nathan Martin: Got it. So slightly above $95 million, okay. So maybe it’s again, a little more than that $10 million which would seem like it would be a little bit light just based on your run rate, okay?

Katherine Gates: Yes.

Nathan Martin: Great. That’s very helpful. And then one more thing, actually, Katherine. The tax law changes you guys highlighted, is that just kind of a onetime thing? Or is there a new kind of tax rate we should assume going forward?

Katherine Gates: No. This is absolutely a onetime thing.

Operator: We have no further questions in the question queue. So I’d now like to hand back to Katherine Gates, President of SunCoke Energy.

Katherine Gates: All right. Well, thank you all for joining us today and thank you for your continued interest in SunCoke.

Operator: This does conclude today’s conference call. You may now disconnect your lines. Have a lovely day.