Coronado Posts $172M Loss Amid Coal Price Slump and Credit Downgrades

Market Pressures Weigh Heavily on Earnings

Coronado Global Resources Inc. (ASX, CRN) has revealed a challenging first half of 2025, reporting a net loss of US$172.4 million for the six months ended June 30. This stark reversal from a US$16.2 million profit in the prior corresponding period reflects a sustained slump in metallurgical coal prices amid weak global steel demand and persistent oversupply.

Revenue for the half-year fell 32% to US$917.1 million, driven by a US$49.5 per metric ton drop in average realised metallurgical coal prices and a 0.7 million metric ton decline in sales volumes. The company cited adverse weather conditions and equipment downtime at its Australian operations, alongside geological challenges at its U.S. mines, as key factors constraining production.

Liquidity Initiatives and Debt Refinancing

In response to the difficult market environment, Coronado undertook several liquidity-enhancing measures during the quarter. Notably, it secured a US$75 million prepayment from Stanwell Corporation Ltd, which will be settled through future coal deliveries starting in 2027. Additionally, the company refinanced its asset-based lending (ABL) facility, increasing the available revolving credit to US$150 million, with US$75 million drawn at closing.

These steps have bolstered Coronado’s liquidity position, with cash and undrawn borrowing capacity totalling approximately US$284 million as of June 30, 2025. However, the company’s net debt remains substantial at US$238.4 million, reflecting outstanding interest-bearing liabilities of US$500 million.

Credit Rating Downgrades and Going Concern Concerns

Credit rating agencies have responded to Coronado’s financial pressures with downgrades in quick succession. On June 30, Standard & Poor’s lowered the company’s rating from ‘B-’ to ‘CCC+’, followed by Moody’s downgrade from ‘Caa1’ to ‘Caa2’ on July 7. These downgrades triggered review events under the ABL facility, though Coronado successfully negotiated to maintain the facility’s terms and availability.

Despite these negotiations, the company’s management has expressed substantial doubt about its ability to continue as a going concern over the next 12 months. The outlook remains uncertain given ongoing volatility in metallurgical coal markets, potential covenant compliance risks starting September 2025, and the need for further operational and financial improvements.

Operational Highlights and Outlook

On the operational front, Coronado reported a 20% quarter-on-quarter increase in run-of-mine coal production in Q2 2025, supported by commissioning of the Buchanan expansion project in the U.S. and progress at the Mammoth mine in Australia. However, total saleable production and sales volumes remain below prior year levels due to weather and equipment issues.

The company continues to pursue cost control measures, asset sales, and alternative funding options to navigate the challenging environment. Investors will be watching closely for signs of market recovery and management’s success in stabilising liquidity and meeting debt covenants.