SunCoke Energy Partners (NYSE:SXCP) posted 2Q earnings that had income attributable to the company at $20.1 million (excluding pre-tax acquisition costs), compared to $15.8 million in the same quarter last year. Shares are relatively flat for the last month.
The company did trim its full year EBITDA and distributable cash flow numbers due to higher costs and lower yields. However, it believes it can increase cash distributions per unit by another 5% this year.
Its annualized distribution yield is already well above our previous estimates. It has increased its distribution for six straight quarters. Since covering SunCoke back in July of last year shares are up 33%. It also still pays a hefty 6.5% distribution yield. As we noted last July:
The cokemaking business has a lack of competition and solid/stable customer base. We also think the five-year window that SXC [SunCoke Energy (NYSE:SXC)] will guarantee cash flow provides an inherent floor for the stock. Thanks to its agreements, SXCP is also able to pass down any unforeseen increases in operating costs. We also like how SXCP is expanding its presence across the steel value chain.
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