Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Arch Resources Inc., First Quarter 2023 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Deck Slone, Senior Vice President of Strategy. Please go ahead.

Deck Slone

St. from morning Good for today. thanks joining and us Louis,

be Before statements statements made let Securities me Litigation performance relating the according that certain remind you may financial during and our Reform future we Forward-Looking Private expected Statements to begin, to business considered this Act. call, including

address that to by degrees different statements, Forward-looking matters uncertain. their nature, are

materially in forward-looking statements. SEC These We of expressed different our results or be not that we forward-looking future reports annual and uncertainties, result which may quarterly future are otherwise, information, those actual described with than in may the do more a to our required update our undertake by except as be statements, to detail in whether new law. the cause events file as

you our also this you copy release, of archrsc.com. we like a reconciliation measures remind website our of non-GAAP discuss of plan Investors we to posted would at end find press to the the in can financial the that have section a of which at that morning I

participating to will remarks, Lang, will Drexler, happy CEO; John our questions. Matt be COO; CFO. we this call and Also our our formal Giljum, be Paul our morning’s take on After

the turn over that, will I With now to Paul. call Paul.

Paul Lang

excellence report across morning to good enterprise. driving financial our that could and core are the strong join quarter, value your team everyone. glad in and while Deck pleased the interest first Arch Thanks again the you today. metallurgical call us appreciate We in results operational demonstrated I’m delivering Arch segment on in has entire the

with average margin by continue simple long-term operations. short, clear value significant actual driven for success during million cost our coking fronts and $XXX.X ahead and quarter-over-quarter and our team cash of period achieved EBITDA adjusted the creation. unit generated the press improvements all the in price, Arch on plan by coal to In selling Overall the

XX% than by almost sequential average cash generating $XXX sequential in team metallurgical and the margin despite the working During increase increase cash core a in more X% for $XX discretionary quarter, company’s the showcased achieving capital. EBITDA an built cash expanded our million a adjusted capabilities the Arch in flow, delivering nearly in million segment, generating

and and balance drove retiring securities, to reducing forward cash or ongoing XX% a our strengthen already efforts $XX by $XX net of our intense remaining positive sheet in an streamline million our with our by modest maintaining indebtedness and We position incremental convertible million.

$X.XX significant million robust approximately convertible of generated last we shares, finally, dilution value dividend structural through program, repurchase precisely capital shares. XXX,XXX $XX.X And million shareholders per and or return quarterly and and our of share, thus of deploying avoiding our declared securities a our $XX settle for to

more to more made progress the It last its than in on has share have is deployed June more February program, $XXX period security with settlements over of repurchases worth $XXX billion than relaunching reflect program, pausing we more announced million. dividend along convert item, of this XX-months, of return relaunch of tremendous payments the just given Arch capital Since the year. consisting that $X our inclusive dividend here a of than million convertible and last since through just

million X.X strong well now of shareholders. to deployed convertible share return the six-years, over that is have program than Arch through as demonstrating commitment cash Year-over-year the capabilities settlements, an and our as our these capital horizon, I million time security dilution aggregate might our our course longer through add generating avoided we a rewarding of more repurchases $X.X past shares.

in allocation and and shareholder As be aligned appropriate, has we do preferences. with driving value we interests stated to have capital program the well durable effective believe our proven is repeatedly, capital model return and tremendously shareholder

for proposition program to this our value result, expect a we future. As the of the fully foreseeable remain centerpiece

seeing turning conversation discuss the to global coal take to we additional the I a are like color on the the dynamics moment would to John Before in over for operations, coking markets.

in As view coking macroeconomic no recent due to months, significantly you prices doubt coal global largely are have in our retraced concerns. aware, seaborne

early the price High-Vol March, loaded from a declined coal per has East the coking in U.S. on is about It of A XX% to $XXX $XXX Coast ton. vessel metric

to which the cash it lowest While quartile pullback of is that of clearly, margin, being value a stepped healthy in still cost even significant Arch’s prices, low here that today a generate illustrates important is again point mines cost at the the curve. out down

to coking continue see particularly that prices, many coal seaborne in is about But marketplace. indicators pullback constructive we the interesting and

For around furnace year capacity levels last of blast steel around times months-ago. XX by twice demand majority weak count lead prices November new idled million of instance, finished are vast now the tons steel they their above Moreover, orders and has in our for were just at few restarted a what steel global Europe XX% face of the continue loans. in to the trade

on declined more in the first nine the XXXX. remain been XXXX coking a of time, year-over-year At after than coking million pressures of has circumstances all This Australia, by regulatory by and jurisdictions. low situation of combination XXXX, particularly and a underinvestment where an tons depressed follow same already is the incremental supplies two-months years in in constraint of increasing basis exports coal versus coal the exacerbated XX% evident during

recent marginally States prevailed quality Canada, the XXXX than continue high exports but coking sustained significantly the despite to pre-pandemic years. only undershoot were and XXXX, seaborne Meanwhile, next the strong major that historically two United higher of period in of levels, has coal for in sources pricing

large other of coking move in various to face in and hostilities Finally, turn has created a products the these logistics. considerations to in challenges continuing in remains due mark Ukraine, Russia, significant market question which coal in credit the seaborne the supplier

it product global Russian to and to and for indefinitely. in mounting make believe continues we dynamic climate While volume most could pressures a difficult find the that discounts this difficult cost maintain of home business increasingly heavy markets, the

demand in longer the steel expansions term. in Southeast as Given hot we capacity across these metal the intermediate, are as blast increases in constructive ongoing as remain output Asia, as furnaces, well on substantial, supply constraints well

sets the to be progress greatly cash summary, sharply generation high continue our our performance. strengthened stage simplified extended our the We facet position, global quarters, strategy of and longwall. leading coal coking world-class extended of a across to capital cash expanded balance our creation continued believe over capital and net positive success, In ESG future. structure for and reach strong business our In discretionary for value coking returns this industry the recent every robust restored the to on our sheet coal we we have quality focused portfolio, products, our

I over some John performance. call John. that, the now Drexler, operation on will hand our With for to further thoughts

John Drexler

Thanks, Paul and good morning, everyone.

in segment. QX highlighted Paul discussed, selling team and core by price, excellent operational maintained As our our improvements, Arch cost and cash in as average metallurgical momentum sequential cash just margin

of million generating an stepped South of substantial coking QX, $XXX contribution was capabilities of view coal evidence the I of which upshot strong execution franchise segment up the EBITDA metallurgical The plant. from post in Leer cash our and this is clear the

of plant the six cost marked performance despite portfolio. our on in again, is performance impact have ton the entire noteworthy that best publicly in The stands metallurgical underscoring traded quarters, coal peers out particularly metallurgical Arch’s our past higher, cost during at Leer positive of the cost $XX.XX inflationary pushed QX many coking South ongoing pressures the structure view, overall QX my per of segments

favorable the might more XXXX, will that progress up I still gains Leer and geology. into we add here in step South in volume XXXX in productivity continued as that through another growth result volumes

full-year Given XXXX this for XXXX tailwind, cost and we of ton believe we appropriate that midpoint is achievable and per $XX and positive are the equally the our reiterated for beyond. about guidance at outlook

a again a as of thermal well of substantial amount thermal segment Elk prices and our service our pullback longwall significant international geologic in that in the sub once the Supplementing optimal strong in despite generated are operation Colorado. flow of business, this River challenges contribution Powder West rail continuation legacy metallurgical cash Basin,

$XX.X the segment $XXX $X.X while spending. of million in $X.X In for than a to level QX over expending segment over EBITDA That half in in generation this a capital million EBITDA total, six contributed segment and billion against past total the more total brings years, just in the million just capital. thermal

generated we The we excess effective timeframe, EBITDA our strategy harvest CapEx quick been then over have is just of in than expended that nine have has times far. more in math so which how that tells you

being ahead, a quarter only West typical expect Basin. a the QX due season segment challenges the Looking geologic QX in we modest thermal shoulder the largely Powder contribution of expectation and River the in Elk from that to

past aware, a of has Elk most West or course over you As performance XX-years fairly the stellar of the so. are maintained

our the overall quality coal However, encountered a late in resulted clay in has and mine the a production that and short-term seam layer degradation in QX, product volume.

middle able to to which the inseam the be the impact this of Reserve of time Base. at expect of quarter, the dilution We the through more to we third a expect continue favorable in area longwall have

sales issue, significantly shipments Elk to much Because the tons will constrained of less over this which one XXXX to volumes million quarters. around could X.X as next in as be West million lead down tons, two exports

in around XXX,XXX currently all million to of tons around we along table priced total, now tons, is which of West the reflected export with guidance domestic constrained In and QX, expect Elk volume. expect and better only X.XX in back business positive from QX total EBITDA usual in the status thermal to to and QX thereafter. this, we segment as With be still modestly but in

On and since has metallurgical the Arch advances to marketing contract in make strengthening expanding XXXX front, began. our team continued book the

coking the in the as of in about noted, coal growing global a Paul strength face prices weeks recent softened of whole. As anxiety have the economy

our Fortunately, midpoint advanced for the of of Arch the more portion and of volumes for commitments based significant a entered in guidance, coal already is XX% in coking on has remainder. discussions XXXX, than into anticipated

even use value time we this this the of While environment a tied market volume -. quality be for our shipment, weakening is of price market much the to our indication appetite for the products outstanding to face of strong of prices will a of clear in in high products, closer the published believe

in stands note committed segment essentially tons million volume, exceeds thermal midpoint. sales for XX that tons, volume, at We thermal should which guidance show our at million We sold also at XXXX. that we XX are out which thermal while the currently per stands our sales our

we we the future expect to year over natural as years, similar Given and thermal enter that carrying the rail Powder customers years. with proceeds, about Basin in gas into volume could prior low discussions River issues pricing into ongoing

we Basin Powder as we commitments. could preserving commitments. the currently the if are expect such of value be in carryover volumes only certain we entertain our current X% economic existing past, River will the of We course, Of requests the are full

of single area turn Safety let’s and most Now, Environmental performance, our to Stewardship. critical attention our

safety quality record three Arch’s and QX performance, zero without recorded During year’s subsidiary and the on exceedance. have more now a in Arch’s strong with year pace started quality total exceedance. years violations of a operated operations environmental water water In operations once fashion than total again subsidiary last a zero

In has in for awards Virginia state past Safety in also been along addition, Arch’s so Leer’s Leer Leer the Leer Leer with honored Virginia the with seventh The with were mine preparation South operations, West honored recently Guardian the plants of the State awards years. excellence. idled of mines, it honored for time represented West by eight reclamation Mountaineer one the Beckley Excellence. the of award and the and

want mine ethical their the for corporate I safety, performance our abiding deep to award honors, thank In operations reclamation and was for to the workforce and and most Colorado West the corporate stewardship, behavior. citizenship highest excellence tremendous in mining environmental Elk entire outstanding with important commitment safety these of values, our congratulate the honored and the award. by state addition,

have a professional fortunate We team. such to truly performing high are and talented,

for on will With Matt. now that, to performance Matt call I further and over our financial turn the results. discussion

Matthew Giljum

perspective, already and sequential segment Paul earnings. in pricing productivity From covered the improved driving with have in John good morning, highlights Thanks, earnings EBITDA the metallurgical improvement an and John favorable everyone. pre-tax and and

we as with and on cash liquidity Starting the QX $XXX cash the capital $XXX working in cash will flows, and my I flows structure. million. comments keep operating experienced totaled quarter’s nearly build capital of flow million focused

correctly levels amount the of the working increase. the We in were haven’t anticipated underestimated had at direction capital seen change, nearly Notably of a inventories but at we the XXst decade. March

expect this haven’t started to into detail see two-years, this minutes, the cash but current And nearly of we accelerating. before will flows few over year. inflation remainder liabilities we get well in low in this to and of I unwind more the a much or benefit build in been see clearly,

section on to based two below for million, point items. the total spending of over I guidance. Capital wanted financing quarter In ratable, the the cash $XX our statement, which significant out just full-year was flow

outstanding the we quarter First $XX over exercise of in million warrants. from the of received all,

the exercise can on with payment. holder the the be exercised gross the of either basis XXX,XXX at saw with gross warrants for on The those basis, price warrants no the holder cash of or quarter, net the we election with paying nearly majority exercise a vast In opting the settlement. a of a

I item along convertible we bonds quarter convertibles. proceeds repurchase of to the with warrant was from other as the exercise, the cash The utilize the discretionary flow repurchase to remaining wanted highlight the during

or the we As that convertible have bonds and settled course prioritized repurchased. the the discussed all are we the have to report of year quarter, the of last over happy been last settlement now convertibles

million $XX Board dividend to XX% May declared the of the and of that discretionary on paid discussion XXst. be flows will of or record capital of on $X.XX dividend the with per our formula share. amount, XXth consistent up cash Finishing a flow The June totaled has for return stockholders quarter cash

We hand at as of under of cash ended $XXX are end, with at our prioritize availability liquidity the the end $XXX quarter remaining the we range credit lower repurchase liquidity quarter facilities. we and convertibles. target and at including the Cash on our of million million, total

Moving of the to and I the the could how to out discussion year. that the revisit XXXX, working on wanted capital play rest over remainder of

receivable, discussed have the at that accounts quarter last least at dynamics first Looking pricing we quarter-to-date. reversed

true volumes in will than year. up quarter the the second The that dynamic the we would export We will Asian provisional expect later cash likely on ultimate pricing to benefit following be flows. higher price realize

capital On well anticipated large are export timing. increase be during as an provisional prices higher currently working by to the in the as degree flip offset expected side, shipments those likely quarter, to terms overall a in vessel of

inventory. to Moving

in higher to increase currently need quarter. require to have parts protect expect in the from the increase the and don’t should levels we the experienced on activity challenges hold inventory favorable overall second export March, viewed against to as critical increase working some in more volumes While for the be the as Leer permanent, South, levels. we be change in at to peak remain capital of the we slightly factors, Based spare expect supply chain these overall

prevailing at that metallurgical the the more weighted levels, fourth we significant on Trends prices. with the will of half would in back half, But year assuming prices toward be a in back dependent largely of quarter. the current the expect much benefit

Next, capital I around wanted to provide some additional detail our structure and share count.

QX. two were in warrants. steps capital of two-thirds towards remaining the there mentioned, I significant the As simplifying the remaining repurchase of the nearly The and convertibles of structure exercise

The had two convertible repurchase benefits.

shares would And our levels. payments. First second, future quarter compared eliminated by over it ongoing to as from share resulted it diluted that XXX,XXX dilution count year end have end any reduced dividend

on the With a count, resulted impact basic net regard included warrants settlement. increase to first already the diluted share based count exercises the share warrants, of in assumption the the quarter but the in an of the

the the increase the not million their those count reduced the shares. fact, shares exercised next over exercises, diluted due in outstanding through convertible than in given QX fully warrants share increased expect quarters. and in a the to primarily have over course we shares that quarter in there would of was and We of XXX,XXX XXX,XXX now similar count the remain basic repurchase fully warrant diluted to While actually share be by terms one the more And just buybacks. couple

gross use quarter. the to basis, have dilution proceeds Going did warrants reduce to we the extent as will on additional the a we first forward in exercised just cash we

be execute XX% remaining of basic continue share overtime. count. basic the And expect no warrants we count the would in share program, diluted return there change diluted second count, continue should fully the fully the the to While we as exercise on the to to the and will increase the capital both of decline

remains purchased caps our the or yesterday’s remains is cap value more that the $XX but diluted not at shares price. factored The reported while recorded call call financial than Finally, XXX,XXX bonds, the intrinsic convertible repurchased caps we million, closing all the call statements, otherwise share of we share time of fully approximately the the count at our outstanding. have into in representing issuance

wanted few Before highlight operational I briefly call questions, from guidance. turning and a for our to the items financial

back For year. reiterating volume with the segment, sales and anticipate the our are increases in we we increase half metallurgical the XX% volumes roughly cost the and in in quarter, additional guidance a of second

the costs to in full-year the of with reduction already sales thermal guidance, $XX.XX reflect guidance increased volume impact volumes the noted and per has cost in now expected the lower John range ton. we our to have $XX.XX our of

expect million for our previous spending of to and capital taxes. cash net guidance also SG&A, interest $XXX continue full-year and to $XXX We million expense maintaining

ready questions. the that, are I will to over take With back call turn Operator, we you. to

Operator

now with question first begin Lucas Our Instructions] the We ahead. will B. Securities. Please question-and-answer session. go Riley comes [Operator from Pipes

Lucas Pipes

as even expected volumes that met-coal you everyone. Thank question in there XX% could QX. bit would from costs? what a you. and My is moves lead first it you good seeing little the if on the there that appreciate with operator or any improvements really factors Are cost wondered should the here and are increase in the I good And you further morning specifically quarter. met-coal to there speak longwall like cost the job on first side offsetting much relates Thank your outlook for to very color

John Drexler

are costs. we of we But Drexler. that has all forward ramped to in is production gotten and levels expect getting be as of that and team kind up have move of in able progress we the the South managing line. segment, the to proud to benefited overall Leer really with, East volume we In John from metallurgical great This been making

We in to guidance. year. wide have and cost up still We a back a of the half do move got more the expect the range and opportunities volumes step

at back cadence you half that. would of imply to that of million get year we kind the are million the the shipments, in run ton tons a sales we that kind look it to XX of year X.X of If approaching of our and need rate

good put that to targets able position should see still do cost in a inflationary chain have us be that we achieve pressures supply pressures, that and So to out there. we in We the well lowest costs demonstrate will managing forward, in metallurgical and is portfolio the team great the ability the those continue with to industry. the move to a again, quartile think once

Deck Slone

is I first it XXX,XXX Deck, only that shipped while X.X Lucas tons more actually on we that would quarter in the than add the side. production look produced million we tons,

So really and driver you cost the is in front. the production, look won’t probably QX know, terribly on that different, of terms bigger

So those incremental while will likelihood given production the that looking change be QX. all QX much for certainly improvements, in from we in won’t

a our to expect as wouldn’t further maybe QX costs John in that down is production to continues its step down. target drive You those is But said, is, to continue climb QX. QX, certainly

Lucas Pipes

That globally frame metallurgical on cost you helpful is the this at sit up say How you you the marginal related side. where global follow-up would coal were to curve? question cost asked very to and cost time would and

Deck Slone

U.S. cost we how me if public some of competitors. kind there go. and the let is it a Deck me that is in coking you U.S. would public look a let about that, on that start And be this seems the a the just the guidance with here we for But based coal from talking is and Lucas again, for of is question. maybe frame average at range just guidance that give it see of tough the that around $XXX, out costs,

than cost be top that is expect production that higher marginal that for in cost cost know, the certainly it you that, would you would if of probably call the that case, that, And the highest $XX XX% curve. increment

or to And that in terms at really the in are U.S., so is the have $XX $X structure you fundamental clearly proposition that that sort of know, our so we a shows when value of pretty given significant $XXX advantage midpoint, the that guiding fact marketplace. cost the we spread in

a million would add And further. XX costs, can I as should that as knows, who we tons just towards John the believe our tons, at able is said, goal we guess we towards drag bit I move move this, maybe least to maintain XX And next year. million to them we to be do down

are be of Meanwhile, to we not There is the and inflation, reductions marginal at that be. that costs the could may way most rest so cost industry is counterbalance for grow. those of going the XXX They no in looking fighting producers.

There that low that are are have we legacy aren’t think large first Australian asset curve, in on are really well we those probably the positioned exceptionally mines occupy cost certainly producers that U.S. the very that So rolling surface that quartile. would

solidly second in is, the and we what would perspective, be factor I may quality you from is fact say are better the our in a quartile then we it product that. that when margin than

feel good So our we position. again, very about

Lucas Pipes

little your in you And lots will That perspective. commitments with been try is domestic the could price provide color a Obviously, relates very quickly to side. color. I have where really you are thermal on and squeeze if XXXX the to bit Thank those coal, roughly. much for prices of natural thermal commitments in market and gas fixed in third where headwinds very I of coming helpful it here as one roughly wondered a

Paul Lang

the we have markets, Lucas, thermal have as Yes, what it we seen with gas weakened natural have is seen pricing.

established XXXX has we in I got a continue some pricing, have of a to weakness feel recently we already significant that prior seen for more here think the portion have good we of for value. seeing book great that locked to

the pressures roll up over As see we expect indicated remarks our some XXXX. may gas, the that as the given into in price volumes, we X% to in low we prepared of our marketplace, of given well, natural committed

we move think we carry capturing make of sure that the are of good year does for have we how that of over the the value we time establishment again, that into I forward. will XXXX. once about book are and will next all any We that But feeling

Deck Slone

that it position, have few bit solid little in would add again. at even we last only I XXXX a is - the for Lucas the weeks, even added Deck prices. last to our

So driven there, aren’t and probably prices finding by fact are opportunities while that. utilities them now, pressure and doubt the be. inventories low, natural and where would is is they are that there certainly no there’s like out gas we to largely Even

So still doubt thermal modest is some that there is the has market there tougher. opportunity, but gotten no

Lucas Pipes

Thanks Alright. I best appreciate the all and color. again luck. of

Paul Lang

Lucas. you Thank

Operator

The The from next Benchmark Please Company. go question Nathan Martin ahead. with comes

Nathan Martin

Hey good quarter-over-quarter. morning maybe guys. appreciate your down thermal I meaningfully on a Thanks I for market. Creek Lucas’ Any already just that? notice I production last taking updated fallen the thoughts Maybe thoughts Coal on there. question. from was on the comments guess also standpoint,

John Drexler

know have on you as significant substantial completed. focus a putting have Coal been reporting, a have we in Coal been Nate Hey reclamation we Creek, spending to position Creek like

at completed are with XX% there. We about the reclamation

property with able that We that from to small and very we from an are active perspective perspective. to very from do of support a supply still have continue small area a some operation perspective a footprint commitments operations

So of we continuing this expect we at kind to as we Coal are out things move play and forward, as expect. Creek

Nathan Martin

from thoughts would about there the how much guys general, is the thermal how and then shipment when PRB? I from you tons appreciate at look Elk, coming the maybe those seem the guidance maybe in it much do say we so decrease and or a West million would that of John geology

John Drexler

West the manage we that at Base expect challenges you the the continues third to the seen the Nate Elk have and Reserve to we in with at Yes that we we indicated volume through another to as favorable look team well impact, of move area quarter. very as get if there

from the following tons million from the volumes that carryover of of that comes West our expectation rough overall remainder reduction into with a X% year. being of guidance Elk About committed the

Paul Lang

have You And just times. obviously clear we that this seen play to committed. be want know have out many these tons I we

could out, on are what the thermal John future. to, is the trying get will the side. is rest of play source is of give good we what us to that of think ahead value is which in and Look, view say, is to are though, I year that done or, providing really everyone the this of intend cons a we as price be guidance it So think the we X%, that said, a I rollover, acceptable at the if retain important,

Nathan Martin

that to domestic guys the shifting more Makes next looks the a little - you it side, side. I sense, like over Paul on appreciate and bit maybe

So maybe opportunity more how could specifically compares get we you a there export little what the color in to that seeing about are market? versus

John Drexler

Yes, Nate, the for opportunity commitments. think, some we there the quarter, work was first through domestic quarter, I as additional

at If with obtain we all the you fixed look there, for those price to the we were on math able were pleased the full-year. price volumes

need some ready market, opportunities, remaining but look year there and remainder there things still see as we opportunity value, stand at appropriate we the see we probably could most for of export the the see going we market. of if and export value, in the the be we The rest we the to the be is primarily to believe into be if are of

Paul Lang

the American North market. seen other times at at underperformance We by producers have times,

And few volumes to we economically attractive, ready in stand if the that is if typically and step trends at you for, have the so, is we here. know, it a

If you the in last late was last train the significant, there, North than we very did rather anything deal was season. done, it American one that probably

net domestic today And we as today, on would the those prescient, were what achieve exceed you backs back because where Those net seaborne given current are it pretty look prices prices. achieving seems list of today. on that sales it at

we So forward, the seaborne the go to we focus feel good said, about going way really, markets. we John have But managed as is be on that. as

Nathan Martin

maybe to then and guys thoughts, those appreciate wrap I one things you up. Matt, for

expectation quarter, could favorable dollar slight a for the here second in working that? and you You mentioned in if cap change around amount put the

Matthew Giljum

way maybe as around as going guess, then the starting with know, be quarter, are I we it, I little a mentioned, to the for I Nate, of at more you detail likely permanent. so that, Yes the look viewing some would inventory we saw

we to quarters numbers, this probably built about And that so two-thirds during is And going say of quarter. it using just the $XX year. to probably fair that, of inventory rough to reverse three you know, is million not

at if means the build So for quarter, million. remaining the what you is for roughly that look about it $XXX

pricing see I will receivables, offset timing. mentioned, little in the trends vessel bit will some primarily a provisional get We favorable impact by as

the But prices they to rest here falls XX% remaining of from there play year. out. think of the the no med more is turn that are capital half I go in we working I expect QX of but in that build that where that would back than say probably assuming it do all is dependent probably would Obviously, on would turn prices of that where how and

Nathan Martin

I for helpful Matt, again and it appreciate there Thanks Very leave best of guys. timing Luck. will that. I

Paul Lang

Thank bet. you Nate, you

Operator

Next Dudas Please from Michael go ahead. Vertical comes Research Partners. with question

Michael Dudas

morning gentlemen. Good

what First QX market mean, how indicated back the what any of are back health any this into going you indications that product guess and decline more of the to normalize the when up be is would production, get I and there thoughts in term, been the how has you know on that - on on there West that of is you the ramp in and as year? Elk market you certainly the which been? reversal I pricing

Paul Lang

issues. disappointment has ran reaches layer an we clearly Elk and into I we currently of of reserve Yes in in are issue have unexpected are a West quality kind our base mining with encountered, Michael, caused that think, base, just where look, is the we southern what sequence and that reserve and production overall clay great insane overtime the right and now been

of we that market we working as base We manage are From behind we be managing with us. better through are customers volumes. dealing the to issue the expect reserve mid we have areas and and the in indicated, perspective, third the to quarter, reduction with in that are a

end coal Even with utility see couple into standpoint issues with that West a we a the and that thermal the does the production in of industrial, still and occurring from markets the one, things, region that are softening the are is of in that seeing market, both that domestic we some supply needed. Elk

work where this need to back and through excited are So we get to we be. to

still despite in of arena, is prices, market is an to the back even softening that return. And the attractive - it international

focus and and job of West to run, to get a it is we be. to expect to the get on we sequence to our where back is managing doing back So get need Elk there back great where team

Deck Slone

that is Deck. longer think term Mike And a U.S. it systematically coming for When down, has market When Elk, you shutdown. to you look continue for thermal get certainly positive pretty smaller, about we in to the when power look you based PRB we When outlook. to consumption are so going since overall it see coal continues assets, XXXX. at generation see West been as is that the and

coal really the for customers industrial West actually large coal to to future. some foreseeable committed has are on that Elk run plan and

we and continue so really XX-years meaningful to West can have West more there base certainly Elk. life And Elk the see reserve make contribution we of over a the at or

window market, the when and it roll a on And so course, is highly Elk can as to of seaborne seen. and mine is the we open have profitable West continue

down and now, Elk in $XXX. As John somewhat at that $XXX, markets sitting at noted international is a Newcastle’s back with West to even right net close prices

that And erosion. component so the over opportunity highly profitable in declining. and Elk PRB thermal same is to while and see a EBITDA is of West from going of to time times experience continue normalized quite probably segment Elk for to it as be is West may as indicated half frankly, going the level we its thermal our not sort

Paul Lang

Really job up. is did think framing the of would good other point Deck I add I a

Our talk term, expectations fairly are longer positive. let’s

that while the overtime. Newcastle is quality to that factor continues the than is better of out coal there other improve quality is The

for have bump outlook road think I little a are anything, hit mine. our the that Elk if but West look we in about feeling So really good longer term we

Michael Dudas

is that encouraging sense that sulfur very equality Thanks heat or and is anything unique? of is else and

Paul Lang

West shipped the is Newcastle. even value quality Well, and than better we out CV today of Elk better ash

Deck Slone

overtime. Mike up And that won’t finds go current

Michael Dudas

are and that seen and you West. could that you share guy we in that you in but or changes significant East and what real any pricing changes or in is vessels with of impacts can for meaningful us? none Excellent, the what seeing you. of And saying the shipments today again, assess have at Paul John, quarter performance witnessed transportation and you logistics you thank

Paul Lang

the different last you stories a bit to start three So, it is know, months - on, West. little let’s

So have ports as could in the CSX. ran ran but little and, East not well railroad service well I and of start off on, by The also. The particularly slow, ran will large, East. quarter that started the with the really a out the any issues we received,

in shape are we good pretty forward. feel going we So

rough bit The little in the different River were January February was we little in and and it of a while Basin West a in seen. April, see improvement a not bit greatest March, incrementally the more a is story. are month, performance we did have of particularly pretty Powder we little and seeing bit

So improvements to East. the keep struggling the are - that in with up the have seen West we

a the we while international will well On we obviously heavily marks. in QX. the pricing, tied And very did little you know, we in see are to QX, bit determination

QX thing going in rail the a other little one that rate. hurt us bit current off is quarter The road is the to is

see we and be adjusted QX, into road it the rail will in QX. So will higher then

Michael Dudas

Excellent. Thanks gentlemen.

Paul Lang

Michael. Thanks

Operator

This question-and-answer Paul the concludes I remarks. Lang over like to to closing would session, for any turn our conference

Paul Lang

for again your interest Arch. in Well, thank you

and As XXXX at a you see, team is the level. start, Arch off executing high a to could is strong

market to global believe the While prove coal that patch could one coking be a is soft we constructive. experiencing ultimately

with creation is our with for sharper, of forward business believe our passing facet on quarter value driving strategy focused remain and compelling. story each we in We every more the even long-term becoming simpler

look late everyone. to conclude and forward group will Stay With reporting July. the in call safe we the and to healthy that operator

Operator

presentation. attending now The conference you today’s has for Thank concluded.

You disconnect. may now

Arch Resources (ARCH) 27 Apr 222023 Q1 Earnings call transcript