The decline in operating income was also driven by $3.1 million in accelerated depreciation at its Indiana Harbor plant where a major refurbishment is underway.
SunCoke Energy chairman and chief executive officer Fritz Henderson said: “Our coal business continues to be a challenge.
“In response to industry conditions, we have made substantial progress on our coal action plan, reducing coal production costs by about $19 per ton, and we are confident in our ability to further drive down these costs.
“Our domestic coke business continues to deliver solid results.
“We believe we can sustain and build on this performance as we focus on achieving operations excellence and continue to make progress refurbishing our Indiana Harbor cokemaking facility.”
A $14.4 million drop in adjusted earnings before interest, tax, depreciation and amortization to $52.4 million for the quarter was partly attributable to higher corporate costs.
Corporate expenses rose $3.1 million to $8.7 million in second quarter 2013, reflecting higher incentive stock compensation, public-company costs, and increased legal expenses.
“Adjusted EBITDA was unfavorably impacted by the decline in average coal sales price,” the company said.
“This was partly offset by lower cash production costs of approximately $19 per ton, reflecting the success of our coal action plan initiatives, which include idling mines, reducing staff, upgrading equipment and installing a new cyclone system in our coal prep plant.”
Total revenues were down 12.4% to $403.7 million in the 2013 second quarter versus the same prior year period reflecting the pass-through of lower coal prices in SunCoke’s cokemaking business and a $52.55 per ton decline in average coal sales price in its coal mining segment, which was offset in part by higher coal sales volume, the company said.
Suncoke estimates its domestic coke production will be more than 4.3 million tons and coal production to be approximately 1.4Mt for 2013.
“Looking ahead to the second half of the year, we stand behind our full year 2013 guidance for consolidated adjusted EBITDA and earnings per share of $205-$230 million and 30c-55c per share, respectively,” Henderson said.
