Peabody Reports Results For Quarter Ended September 30, 2024
Completed $100 Million of Share Repurchases
Centurion Development Making Exceptional Progress
ST. LOUIS, Oct. 31, 2024 /PRNewswire/ -- Peabody (NYSE:BTU) today reported net income attributable to common stockholders of $101.3 million, or $0.74 per diluted share, for the third quarter of 2024, compared to $119.9 million, or $0.82 per diluted share in the prior year quarter. Peabody had Adjusted EBITDA1 of $224.8 million in the third quarter of 2024.
"In the third quarter, we delivered strong operational and safety performance across all segments and completed $100 million of share repurchases," said Peabody President and Chief Executive Officer Jim Grech. "We continue to execute on our strategy and recently provided a comprehensive update on Centurion, repositioning Peabody as a leading metallurgical coal producer."
Highlights
Reported third quarter Adjusted EBITDA of $224.8 million and generated operating cash flow of $359.9 million
Centurion development rates continue to exceed expectations, developing 2,700 meters in the third quarter compared to a plan of 1,200 meters. First development coal was washed in September and first customer shipment is scheduled for the fourth quarter
Powder River Basin volumes were better than expected at 22.1 million tons
Seaborne Thermal production increased, adding approximately 300 thousand tons to saleable coal inventory during the quarter
Completed $100 million of share repurchases
Declared a dividend on common stock of $0.075 per share on October 31, 2024
1 Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA margin is equal to segment Adjusted EBITDA (excluding insurance recoveries) divided by segment revenue. Revenue per Ton and Adjusted EBITDA Margin per Ton are equal to revenue by segment and Adjusted EBITDA by segment (excluding insurance recoveries), respectively, divided by segment tons sold. Costs per Ton is equal to Revenue per Ton less Adjusted EBITDA Margin per Ton. Management believes Costs per Ton and Adjusted EBITDA Margin per Ton best reflect controllable costs and operating results at the reporting segment level. We consider all measures reported on a per ton basis, as well as Adjusted EBITDA margin, to be operating/statistical measures. Please refer to the tables and related notes herein for a reconciliation of non-GAAP financial measures.
Third Quarter Segment Performance
Seaborne Thermal
Quarter Ended
Nine Months Ended
Sept.
Jun.
Sept.
Sept.
Sept.
2024
2024
2023
2024
2023
Tons sold (in millions)
4.1
4.1
4.2
12.2
11.8
Export
2.6
2.7
2.7
7.8
7.4
Domestic
1.5
1.4
1.5
4.4
4.4
Revenue per Ton
$ 76.21
$ 74.43
$ 71.38
$ 73.99
$ 89.06
Export - Avg. Realized Price per Ton
105.51
98.43
99.55
101.13
127.67
Domestic - Avg. Realized Price per Ton
25.36
26.69
20.92
26.11
23.23
Costs per Ton
47.01
49.14
43.68
47.96
48.35
Adjusted EBITDA Margin per Ton
$ 29.20
$ 25.29
$ 27.70
$ 26.03
$ 40.71
Adjusted EBITDA (in millions)
$ 120.0
$ 104.4
$ 115.5
$ 318.2
$ 477.0
Peabody expected seaborne thermal volume of 4.0 million tons, including 2.5 million export tons, at costs of $48 to $53 per ton. Better than anticipated production and costs drove Adjusted EBITDA margin per ton higher by 15 percent compared to the second quarter. Higher production resulted in adding approximately 300 thousand tons to saleable coal inventory during the quarter. The segment reported Adjusted EBITDA margins of 38 percent and Adjusted EBITDA of $120.0 million.
Seaborne Metallurgical
Quarter Ended
Nine Months Ended
Sept.
Jun.
Sept.
Sept.
Sept.
2024
2024
2023
2024
2023
Tons sold (in millions)
1.7
2.0
1.5
5.1
4.8
Revenue per Ton
$ 144.60
$ 149.29
$ 162.02
$ 154.31
$ 189.50
Costs per Ton
128.04
117.47
110.38
126.98
132.74
Adjusted EBITDA Margin per Ton
$ 16.56
$ 31.82
$ 51.64
$ 27.33
$ 56.76
Adjusted EBITDA, Excluding Insurance Recovery (in millions)
$ 27.8
$ 62.8
$ 78.6
$ 138.9
$ 271.9
Shoal Creek Insurance Recovery (in millions)
$ ,
$ 80.8
$ ,
$ 80.8
$ ,
Adjusted EBITDA (in millions)
$ 27.8
$ 143.6
$ 78.6
$ 219.7
$ 271.9
Peabody expected seaborne met volume of 1.7 million tons at costs of $120 to $130 per ton. Third quarter shipments and costs were in-line with expectations. We opportunistically withheld nearly 90 thousand tons of shipments at Shoal Creek to avoid higher alternate logistics costs and weak market conditions for spot sales. The segment reported Adjusted EBITDA of $27.8 million and is positioned for a stronger fourth quarter.
Powder River Basin
Quarter Ended
Nine Months Ended
Sept.
Jun.
Sept.
Sept.
Sept.
2024
2024
2023
2024
2023
Tons sold (in millions)
22.1
15.8
22.7
56.6
63.6
Revenue per Ton
$ 13.84
$ 14.02
$ 13.79
$ 13.82
$ 13.80
Costs per Ton
11.50
12.89
11.41
12.30
11.98
Adjusted EBITDA Margin per Ton
$ 2.34
$ 1.13
$ 2.38
$ 1.52
$ 1.82
Adjusted EBITDA (in millions)
$ 51.7
$ 17.8
$ 54.1
$ 85.9
$ 116.1
Peabody expected PRB volumes of 21.5 million tons at costs of $11.50 to $12.50 per ton. Better than expected customer nominations and continued focus on cost management increased Adjusted EBITDA margins to $2.34 per ton, more than double the second quarter. The segment reported Adjusted EBITDA margins of 17 percent and Adjusted EBITDA of $51.7 million.
Other U.S. Thermal
Quarter Ended
Nine Months Ended
Sept.
Jun.
Sept.
Sept.
Sept.
2024
2024
2023
2024
2023
Tons sold (in millions)
4.0
3.7
4.2
10.9
12.5
Revenue per Ton
$ 53.52
$ 55.21
$ 53.89
$ 55.92
$ 54.12
Costs per Ton
46.50
45.53
42.28
45.81
40.92
Adjusted EBITDA Margin per Ton
$ 7.02
$ 9.68
$ 11.61
$ 10.11
$ 13.20
Adjusted EBITDA (in millions)
$ 28.4
$ 35.4
$ 49.1
$ 110.3
$ 165.2
Peabody expected Other U.S. Thermal volume of 4.0 million tons at costs of approximately $44 to $48 per ton. Peabody delivered 4.0 million tons at costs of $46.50 per ton, in-line with expectations. For the quarter, the segment reported Adjusted EBITDA margins of 13 percent and Adjusted EBITDA of $28.4 million.
Centurion Update
On October 14, 2024, Peabody provided a comprehensive update on the Centurion premium hard coking coal project (click here to view), estimating a net present value of $1.6 billion with a 25 percent internal rate of return. The project is expected to produce 4.7 million tons annually at first quartile costs over a 25 plus year mine life. Two continuous miner units are operational, first development coal was produced in June, first coal was washed in September and first customer shipment is scheduled for the fourth quarter. Peabody has invested $250 million of the projected $489 million needed to reach longwall production in March 2026. Centurion's benchmark premium hard coking coal from the Bowen Basin is highly attractive to customers in the Asian market, making Centurion a cornerstone asset in Peabody's global coal portfolio.
Shareholder Return Program
During the third quarter of 2024, Peabody repurchased 4.5 million shares for a total of $100 million. The total repurchases for the year is 7.7 million shares totaling $180.4 million. Since recommencing the program in 2023, Peabody has repurchased 23.8 million shares for a total amount of $530.4 million, leaving $469.6 million remaining under its existing $1 billion share repurchase program.
The company declared a $0.075 per share dividend on October 31, 2024.
Nine Months Ended
Year Ended
Sept.
Dec.
2024
2023
(Dollars in millions)
Net Cash Provided by Operating Activities:
$ 486.7
$ 1,035.5
- Net Cash Used in Investing Activities
(389.6)
(342.6)
- Distributions to Noncontrolling Interest
(34.8)
(59.0)
+/- Changes to Restricted Cash and Collateral (1)
(24.7)
90.2
- Anticipated Expenditures or Other Requirements
—
—
Available Free Cash Flow (AFCF) (2)
$ 37.6
$ 724.1
Amount Allocated to Shareholder Returns
$ 127.9
$ 470.7
(1) This amount is equal to the total change in Restricted Cash and Collateral on the balance sheet, excluding partially offsetting amountsincluded in operating cash flow consisting of an inflow of $143 million and an outflow of $200 million for the nine months ended September 30,2024 and the year ended December 31, 2023, respectively.
(2) AFCF is a non-GAAP financial measure defined as operating cash flow less investing cash flow and distributions to noncontrolling interests;plus/minus changes to restricted cash and collateral and other anticipated expenditures. Available Free Cash Flow is used by management asa measure of our ability to generate excess cash flow from our business. The Company's policy is to return at least 65% of annual AFCF toshareholders.
Fourth Quarter 2024 Outlook
Seaborne Thermal
Volume is expected to be 4.1 million tons, including 2.5 million export tons. 0.4 million export tons are priced at approximately $120 per ton, and 0.8 million tons of Newcastle product and 1.3 million tons of high ash product are unpriced. Costs are anticipated to be $48-$53 per ton. Full year volume guidance increased by 200 thousand tons to 16-16.4 million tons due to higher production at Wilpinjong.
Seaborne Metallurgical
Volume is anticipated to be 2.3 million tons and is expected to achieve 70 to 75 percent of the premium hard coking coal price index. Costs are anticipated to be $120-$125 per ton.
U.S. Thermal
PRB volume is expected to be 21.2 million tons at an average price of $13.50 per ton and costs of approximately $11.50-$12.00 per ton.
Other U.S. Thermal volume is expected to be 3.9 million tons at an average price of $52.40 per ton and costs of approximately $44-$48 per ton. Full year costs have been increased $2 per ton to $43-$47 per ton as Twentymile is experiencing challenging geological conditions temporarily reducing production.
Capital Expenditures
Full-year anticipated capital has been increased by $50 million to $425 million primarily due to accelerated development at Centurion and timing of spend at Wambo Open-Cut.
Today's earnings call is scheduled for 10 a.m. CT and can be accessed via the company's website at PeabodyEnergy.com.
Peabody (NYSE:BTU) is a leading coal producer, providing essential products for the production of affordable, reliable energy and steel. Our commitment to sustainability underpins everything we do and shapes our strategy for the future. For further information, visit PeabodyEnergy.com.
Contact:
Karla
Guidance Targets
Segment Performance
2024 Full Year
Total Volume(millions of
short tons)
Priced Volume(millions of shorttons)
Priced VolumePricing perShort Ton
Average Cost perShort Ton
Seaborne Thermal
16 - 16.4
14.2
$69.98
$45.00 - $50.00
Seaborne Thermal (Export)
10 - 10.4
8.2
$102.05
NA
Seaborne Thermal (Domestic)
6.0
6.0
$26.09
NA
Seaborne Metallurgical
7.2 - 7.6
5.4
$151.00
$118.00 - $128.00
PRB U.S. Thermal
75 - 82
85
$13.70
$11.75 - $12.50
Other U.S. Thermal
14.5 - 15.5
15.2
$54.20
$43.00 - $47.00
Other Annual Financial Metrics ($ in millions)
2024 Full Year
SG&A
$90
Total Capital Expenditures
$425
Major Project Capital Expenditures
$275
Sustaining Capital Expenditures
$150
ARO Cash Spend
$50
Supplemental Information
Seaborne Thermal
~40% of unpriced export volumes are expected to price on average atGlobalcoal "NEWC" levels and ~60% are expected to have a higher ashcontent and price at 80-95% of API 5 price levels.
