Warrior Met Coal, Inc.

What they do

Warrior mines non-thermal steelmaking coal from underground longwall operations at Mine No. 4, Mine No. 7 and Blue Creek in Alabama, selling to steel producers in Europe, South America and Asia. As of December 31, 2025, the three operating mines held approximately 179.3 million metric tons of recoverable reserves, with Blue Creek holding 54.0 million metric tons. The company also removes and sells natural gas from owned and leased coal seams. Production totaled 9.3 million metric tons in 2025. Warrior reports as a single segment.

Revenue drivers

• Mine No. 7 steelmaking coal — Low Vol hard coking coal that realizes prices near or above the S&P Platts Premium Low Vol index; positioned as the premium product within the portfolio.
• Mine No. 4 and Blue Creek steelmaking coal — High Vol A quality coal that typically trades at a discount to Mine No. 7; Mine No. 4 and Blue Creek tons sold into the Atlantic Basin target the East Coast High Vol A index.
• Blue Creek export volumes — Primarily sold into Asia on a cost and freight (CFR) basis; longwall operations began October 2025 and are the main source of the recent volume growth.
• Natural gas operations — Gas removed from owned and leased coal seams is sold, reported as other revenues; other revenues were $6.1 million in Q2 2026 and $14.0 million in the first half of 2025.

Recent performance

Second quarter 2026 net income was $87.4 million, or $1.65 per diluted share, up from $5.6 million, or $0.11 per share, in Q2 2025. Total revenues were $509.7 million versus $297.5 million a year earlier, on a 65% increase in sales volumes to a record 3.7 million short tons and a 6% increase in average net selling price to $137.82 per short ton. Adjusted EBITDA rose 193% to $156.9 million, and cash cost of sales (FOB port) per short ton fell 9% to $92.53. Full year 2025 results, however, showed the downturn: revenue of $1.31 billion, net income of $57.0 million and diluted EPS of $1.08, down from $1.53 billion, $250.6 million and $4.79 in 2024.

Strategy

Management's stated focus is now free cash flow generation, balance sheet strength and long-term stockholder returns, with Blue Creek development spending described as complete. Blue Creek longwall operations began in October 2025, eight months ahead of schedule and on budget, and the company is optimizing the first longwall before considering a second. Nameplate capacity was raised 25% to 5.4 million metric tons, and with better-than-expected recovery and a planned fourth continuous miner unit, total company nameplate capacity is expected to rise 88%, from 7.3 to 13.7 million metric tons per year. Warrior has "variabilized" labor, royalty and logistics contracts so costs respond to HCC price indices.

Risks

• Single-commodity concentration — Substantially all revenue comes from steelmaking coal, so an extended decline in HCC pricing or demand directly hits results and cash flow.
• Blue Creek ramp-up execution — The company may face delays or operational challenges completing development and ramp-up of Blue Creek, which supports the majority of its planned volume growth.
• Freight and index realization — Q2 2026 gross price realization fell to about 66% of the Platts PLV FOB Australian index from 80% a year earlier, driven by a 21% higher high-vol A sales mix sold into the Pacific Basin at elevated freight rates.
• Trade and foreign-market exposure — Sales into Europe, South America and Asia are subject to tariff and other trade measures, and competition or foreign economic changes could harm sales and profitability.

Outlook

Management raised full-year volume guidance, citing continued positive customer reception of Blue Creek product, and expects to produce at least approximately 4.1 to 4.4 million metric tons from Blue Creek in 2026 after about 1.8 million metric tons in 2025. The CEO noted Chinese import demand supporting seaborne pricing and long-term Indian steel production growth as positive demand catalysts, while acknowledging continued regional demand and supply fluctuations. The stated next phase of growth centers on free cash flow, balance sheet strength and stockholder returns.