SunCoke Aims to Recoup $70M in Algoma Breach, Eyes $60M Phoenix EBITDA
SunCoke Energy reported a $70 million working capital impact in 2025 from Algoma’s breach of contract, with $30 million deferred cash receipts and ongoing arbitration aiming to recover similar losses in 2026. The Phoenix Global acquisition is expected to contribute $60 million of EBITDA and $5–10 million of synergies.
1. Litigation with Algoma
SunCoke is pursuing arbitration over Algoma’s contract breach, which reduced 2025 working capital by $70 million and deferred $30 million in cash receipts. Management expects to recover losses from both 2025 and 2026 through legal channels.
2. Operational Disruptions
Severe winter weather and a turbine failure at the Middletown coke plant are projected to reduce first-quarter EBITDA by approximately $10 million, with insurance covering the outage until midyear.
3. Phoenix Global Integration
The acquisition of Phoenix Global is on track, with SunCoke forecasting roughly $60 million of annual EBITDA contribution and $5–10 million of synergies in 2026 as integration progresses.
4. Capital Allocation and Guidance
SunCoke returned $41 million to shareholders via dividends in 2025 and plans to maintain payouts in 2026. Management guided consolidated adjusted EBITDA of $230–$250 million and free cash flow of $140–$150 million for the year.