Warrior Met Coal Optimistic Despite 2020 Downturn

BROOKWOOD, AL — Warrior Met Coal (NYSE: HCC) recently reported a net loss of $33.7 million in the fourth quarter of 2020, along with a noticeable dip in production for the full year, but cited its cash flow position in expressing optimism for the future.

The hit taken by the company in Q4 is compared to a net income of $20.8 million during the same time period in 2019, with company leadership pointing primarily to the economic downturn of the coronavirus pandemic compounded by disruptive factors in the market.

Click here for the company's most recent quarterly investor call.

Warrior Met CEO Walt Scheller said despite the impact had on the Brookwood-based metallurgical coal producer by the pandemic, the company reported positive cash flow in the fourth quarter — nearly breaking even for the year.

“We are carefully managing operating costs to address the significant short-term headwinds," he told investors in late February. "At the same time, we are purposefully making capital investments in our mining operations that will benefit the company into the future. We are strongly capitalized and well-positioned to restart our growth trajectory when the global economy returns to higher steel production, met coal demand and pricing.”

For 2020, Warrior Met reported a full year net loss of $35.8 million, compared to a net income of $301.7 million.

The company also reported that production remained flat in the final financial quarter of the last year, as its mining operations yielded 1.8 million short tons of metallurgical coal compared to 1.8 million short tons over the same stretch in 2019. However, overall production fell 7.2% from 2019 to 2020.

Formerly Jim Walter Resources before its bankruptcy reorganization in 2016 , Warrior Met Coal is one of the few publicly-traded manufacturers with large-scale operations in the Tuscaloosa metro area, along with Nucor and Mercedes-Benz U.S. International. The coal mined underground from the Blue Creek Seam by Warrior Met is used in the coking process of steel-making and has been cited for its low sulfur content, which gives it strong coking properties.

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