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Net Income: $34 million, or $0.27 per diluted share.
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Adjusted EBITDA: $144 million.
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Free Cash Flow: $30 million, net of $47 million development at Centurion.
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Cash and Liquidity: Nearly $700 million in cash and over $1 billion in liquidity.
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Dividend: Declared $0.75 per share.
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Seaborne Thermal Segment EBITDA: $84 million with 32% margins.
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Seaborne Metallurgical Segment EBITDA: $13 million.
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US Thermal Mines EBITDA: $69 million.
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PRB Mines Shipments: 19.6 million tons.
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PRB Segment EBITDA: $36 million.
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Other US Thermal Mines EBITDA: $33 million.
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Seaborne Thermal Volumes (Q2 Forecast): 4 million tons, including 2.5 million export tons.
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Seaborne Met Volumes (Q2 Forecast): 2.2 million tons.
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PRB Shipments (Q2 Forecast): 19 million tons.
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Other US Thermal Shipments (Q2 Forecast): 3.3 million tons.
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Peabody Energy Corp (NYSE:BTU) demonstrated strong cost control in Q1 2025, with costs coming in below expectations across multiple segments.
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The company is on budget and ahead of schedule for the Centurion mine, with production ramp-up slated for early next year.
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Peabody signed a significant agreement with Associated Electric Cooperative to supply coal for two plants in Missouri, totaling more than 50 million tons over seven years.
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The company recorded net income of $34 million and adjusted EBITDA of $144 million, showcasing strong financial performance amid challenging market conditions.
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Peabody’s diversified global coal portfolio and strong balance sheet continue to deliver value for shareholders, with nearly $700 million in cash and over $1 billion in liquidity.
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Peabody issued a material adverse change notice related to the Moranbah North mine acquisition from Anglo American, creating uncertainty around the deal.
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Seaborne thermal coal markets have been well supplied, leading to four-year low prices in March, impacting revenue potential.
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The Seaborne Metallurgical segment reported only $13 million of adjusted EBITDA due to weak market conditions and increased stockpiles.
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The company faces challenges with the Moranbah North mine, including no known timetable for resuming longwall production and potential delays due to safety reviews.
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Peabody’s acquisition financing is on hold due to uncertainties surrounding the Moranbah North mine, impacting strategic growth plans.
Q: With the notification of a material adverse change (MAC) related to Moranbah North, what is the process moving forward, and is there a risk of the mine being permanently sealed? A: James Grech, President and CEO, explained that Anglo has 10 days to respond to the MAC notice, followed by up to 90 days to work through a cure period. The timeline for resuming longwall production is uncertain, and significant technical analysis suggests the potential for a prolonged impact. The mine’s future operations remain uncertain, and Peabody may terminate the agreement if the MAC is not resolved satisfactorily.
Q: How does the MAC affect the permanent financing process for the acquisition? A: Mark Spurbeck, CFO, stated that the financing process is on hold due to the uncertainty surrounding Moranbah North. Although there was strong interest from investors, the incident has led to a pause until further clarity is achieved.
Q: What are the implications of the executive orders supporting US coal production and coal-fired power generation for Peabody? A: James Grech highlighted that the most impactful aspect is the directive to halt coal plant closures and consider un-retiring mothballed plants. This has led to increased interest from coal consumers in long-term supply agreements, reinforcing Peabody’s position as a reliable supplier with strong reserves.
Q: Can you provide more details on the agreement with Associated Electric Cooperative and its impact on capital deployment in the PRB? A: James Grech noted that the agreement does not change Peabody’s capital investment strategy, as they have always invested with a long-term perspective. The contract is market-based, and Peabody remains committed to maintaining low-cost operations and strong margins.
Q: What is the status of the Centurion mine development, and what are the financial implications? A: Mark Spurbeck reported that $47 million was spent on Centurion in Q1, with $150 million remaining for development. The project is ahead of schedule, with longwall production expected in the first quarter of next year. The development has been fully self-financed, demonstrating Peabody’s financial strength.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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