Coronado Global Resources Inc. Reports Significant FY25 Loss Amid Challenging Met Coal Market Conditions

Key Financial Highlights for Investors

• Revenue Decline: Coronado Global Resources Inc. reported revenue from ordinary activities of \$1.95 billion for the year ended December 31, 2025, a sharp 22% decrease from \$2.51 billion in 2024.
• Substantial Net Loss: The company recorded a net loss after tax of \$432.1 million, deepening from a \$108.9 million net loss in 2024—a staggering 297% increase in losses year-on-year.
• Earnings Per Share: Loss per share widened to \$(2.58) from \$(0.65) in the prior year.
• Net Tangible Asset Backing: Net tangible assets backing per ordinary share dropped to \$3.69 (from \$6.22), and per CDI to \$0.37 (from \$0.62).
• Dividend Payments: Despite the losses, Coronado paid a dividend of \$0.005 per CDI (\$0.05 per share), totaling \$8.3 million for 2025, but future dividends are subject to strict liquidity and covenant restrictions.

Key Operational and Strategic Developments

• Market Weakness: The company attributed its poor results to persistently weak metallurgical (Met) coal market conditions, with benchmark price averages at \$188.30 per tonne for premium low-volatility hard coking coal (PLV HCC FOB AUS) during FY25.
• Liquidity Actions: In response to market and financial pressure, the company:
  • Secured new funding and refinanced its credit facility, entering a new \$265 million asset-based revolving (ABL) facility, with Stanwell Corporation as the lender, extending maturity to five years and relaxing covenant terms.
  • Received significant liquidity support from Stanwell, including prepayments under coal supply agreements tied to market prices and company liquidity levels.
  • Reduced operating and capital costs materially.
• Improved Liquidity Position: As of December 31, 2025, Coronado reported \$172.8 million in available liquidity (excluding restricted cash), despite negative operating cash flows of \$80 million for the year.
• Debt Profile:
  • Outstanding 9.250% Senior Secured Notes: \$400 million due 2029.
  • ABL Facility: \$272.1 million drawn at 9–12% interest, secured with first priority against receivables and inventory.
  • Other financial liabilities include a \$24.7 million loan related to the Curragh Housing Transaction, with an effective interest rate of 14.14% and a 10-year term.
• Asset Impairments and Non-Recurring Charges: The company did not record asset impairments in 2025 but had \$10.6 million in asset impairments in 2024. FY25 included \$19.3 million in losses on debt extinguishment due to refinancing activities.

Critical Shareholder Considerations and Price-Sensitive Issues

• Going Concern Outlook:
  • The company alleviated prior “substantial doubt” about its ability to continue as a going concern, primarily due to new liquidity arrangements, confirmed by the auditor’s unqualified opinion. However, the outlook remains highly sensitive to production, coal prices, and other external factors.
• Dividend and Distribution Restrictions:
  • Future dividends are tightly restricted. Under terms agreed with Stanwell, Coronado must maintain a minimum of \$300 million in cash liquidity post-dividend and make equivalent repayments to Stanwell for any distributions up to three times the amount paid to shareholders. This severely limits cash returns to shareholders and may affect share price expectations for yield-focused investors.
• Risk from Coal Market Volatility:
  • Company performance is highly exposed to Met coal price volatility. Any prolonged weakness or further declines in coal prices may impact revenue, cash flow, and covenant compliance, with potential adverse effects on the share price.
  • Uncertainties remain regarding the company’s obligations with Stanwell, including contingent liabilities for rebate repayments in the event of a change of control or other triggers, which are not quantifiable but could be material.
• Balance Sheet and Asset Value Risk:
  • Net tangible assets backing per share has declined sharply, raising potential concerns about future asset impairments if coal prices remain low or operations are disrupted.
  • Impairment testing did not result in further write-downs in 2025, but the company cautions that future cash flow and asset values are inherently uncertain in the current environment.
• Debt Covenants and Potential Defaults:
  • The company is subject to quarterly borrowing base and gearing/coverage ratio tests under the new ABL facility, with cross-default provisions linked to its Senior Secured Notes. Breach of these covenants could trigger repayment demands and further liquidity stress.

Other Noteworthy Items

• Foreign Exchange Hedges: Coronado started using forward foreign currency contracts to hedge its exposure on USD-denominated coal sales against AUD costs, posting a \$2.5 million unrealized gain as of year-end.
• No Material Legal Proceedings: The company disclosed no ongoing legal actions expected to materially affect financial condition, but remains involved in routine matters typical for its industry.
• Stock-Based Compensation: The company maintained modest levels of stock-based compensation, with all remaining stock options and restricted stock units fully vested or settled by year-end 2025.
• Tax Position: Coronado’s unrecognized tax benefits stood at \$18.9 million, with no federal or foreign taxes paid during 2025.

Conclusion for Investors

Coronado Global Resources Inc. has weathered an extremely challenging year, with a substantial increase in net loss, shrinking asset backing, and negative operating cash flow. The company’s survival and recent liquidity improvements are the result of decisive refinancing, cost reductions, and support from key counterparty Stanwell. However, shareholders should be aware of the very real ongoing risks:

• Future cash returns to shareholders are at risk due to strict dividend restrictions and the need to preserve liquidity.
• Heavy exposure to volatile global Met coal prices could lead to further losses and possible asset impairment if market conditions do not improve.
• Debt covenants under the new ABL facility, if breached, could force rapid debt repayments and threaten financial stability.
• Any further market deterioration or operational setbacks could again raise doubts over going concern status and impact share value.

Investors should closely monitor Coronado’s quarterly disclosures, especially regarding liquidity levels, compliance with debt covenants, and coal market trends, as these will be the primary drivers of share price and company stability in the near term.

Disclaimer: This article is provided for informational purposes only and does not constitute investment advice. Investors should consult their advisors and review Coronado Global Resources Inc.’s full filings before making investment decisions. The information is based on the company’s public financial report for the year ended December 31, 2025, and is subject to change without notice.

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