SunCoke Energy’s Industrial Services business delivered its strongest adjusted EBITDA quarter since the Phoenix Global acquisition, significantly changing the company’s earnings mix and helping drive a nearly 60% increase in consolidated adjusted EBITDA.
Industrial Services generated $98.4 million in second-quarter revenue, compared with $15.1 million in the prior-year period. Adjusted EBITDA increased to $34.4 million from $7.7 million, primarily because of the addition of Phoenix and higher volumes handled through SunCoke’s logistics terminals.
The segment’s adjusted EBITDA came within $8.1 million of the $42.5 million generated by SunCoke’s Domestic Coke operations. The result indicates that Industrial Services has become a major contributor to companywide profitability rather than a relatively small supplemental business.
SunCoke acquired Phoenix to expand its presence in mission-critical services for steel producers. Phoenix operations provide molten slag removal, metal recovery, scrap preparation, raw-material handling, and other services at customer facilities.
Industrial Services serviced 5.76 million tons for steel customers during the quarter. The segment also handled 6.67 million tons through SunCoke’s logistics terminals, representing an increase of approximately 41% from 4.75 million tons in the prior-year period.
The segment’s results demonstrate how Phoenix is broadening SunCoke beyond its traditional dependence on coke production. Industrial Services now includes logistics terminals and 15 molten slag removal, handling, and processing sites across four countries.
The strong Industrial Services performance was accompanied by improved profitability in Domestic Coke, even as that business recorded lower revenue and sales volume.
Domestic Coke revenue declined to $367.5 million from $410.4 million. Sales volume decreased to 878,000 tons from 943,000 tons, primarily because of the shutdown of the Haverhill I cokemaking facility.
The pass-through of lower coal prices under SunCoke’s long-term take-or-pay contracts and lower energy sales following a turbine failure at the Middletown facility also reduced Domestic Coke revenue.
Despite those pressures, Domestic Coke adjusted EBITDA increased to $42.5 million from $40.5 million. Adjusted EBITDA per ton rose to $48.41 from $42.95 as improved operating conditions produced more favorable coal-to-coke yields.
The contrasting results show the value of SunCoke’s expanded earnings base. Industrial Services supplied substantial growth through the Phoenix acquisition, while improved operating efficiency allowed Domestic Coke profitability to increase despite lower production volumes.
Companywide revenue increased to $475.3 million from $434.1 million. SunCoke attributed the increase primarily to Phoenix, partially offset by lower coke volumes, lower coal-price pass-through revenue, and reduced Middletown energy sales.
Consolidated adjusted EBITDA increased to $69.6 million from $43.6 million. SunCoke said the improvement reflected the addition of Phoenix, increased terminal handling volumes, and favorable coal-to-coke yields.
Net income attributable to SunCoke increased to $13.1 million, or $0.15 per diluted share, from $1.9 million, or $0.02 per share, in the prior-year quarter.
Operating income nearly tripled to $29 million from $9.8 million. However, interest expense increased to $8.5 million from $5.4 million following the Phoenix transaction and related changes in SunCoke’s capital structure.
SunCoke also returned the Middletown turbine to service during May. The company’s heat-recovery cokemaking process captures excess heat for steam or electricity generation, making turbine availability an additional contributor to the economics of its coke operations.
The turbine failure reduced second-quarter energy sales, but its return to service should support power generation and operating performance during the second half of 2026.
Following the strong quarter, SunCoke raised its full-year consolidated adjusted EBITDA outlook to between $250 million and $265 million.
The company also expects full-year net income of between $23 million and $42 million, operating cash flow of between $240 million and $260 million, and approximately 3.4 million tons of Domestic Coke sales. Capital expenditures are projected to range from $90 million to $100 million.
The operating cash-flow outlook implies a substantially stronger second half. SunCoke generated $45.5 million in operating cash flow during the first six months of 2026, as a $97 million increase in receivables placed significant pressure on working capital.
SunCoke ended the quarter with $42.7 million in cash and cash equivalents, compared with $88.7 million at the end of 2025. Long-term debt declined to $653.9 million from $685.5 million over the same period.
The company also declared a quarterly cash dividend of $0.12 per share, representing its 28th consecutive quarterly dividend. The dividend is payable on September 2, 2026.
The quarter suggests that the Phoenix acquisition is beginning to materially transform SunCoke’s financial profile. Industrial Services produced earnings approaching those of Domestic Coke while giving the company greater exposure to recurring services required throughout steelmaking operations.
KEY QUOTES:
“Our second quarter results reflect very strong operating performance from our Industrial Services and Domestic Coke businesses. Industrial Services had its best quarter to date for Adjusted EBITDA since the acquisition of Phoenix, while our Domestic Coke segment benefited from favorable coal-to-coke yields due to improved operating conditions.”
“We expect this strong performance to continue, and with solid outlooks for both business segments throughout the second half of the year, we are increasing our full-year 2026 Consolidated Adjusted EBITDA guidance range to $250 million to $265 million.”
Katherine Gates, President And Chief Executive Officer Of SunCoke Energy
