Earnings call transcript Q2 2023

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Operator

Good morning, and welcome to the Arch Resources Second Quarter 2023 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

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

Deck Slone

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

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

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

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

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

With that, Paul. I'll to now turn the Paul? call over

Paul Lang

Arch QX, join cost the the metallurgical business Thanks, could that core the on us first I'm delivering high everyone. and appreciate We to level another quartile good this report are Deck, call to morning, its and glad continued your interest you during execute performance. in pleased Arch, morning. team in in

for success clear to press and and we value time, actionable with ahead same continue our the creation. simple, long-term plan At

generating the significant by softer million capability environment. team a market $XXX Arch the and in in million cash During company generating adjusted cash discretionary despite the EBITDA quarter, an flow incremental forward net position. strengthen reducing a the delivering maintaining $XXX of already $XX and by significant drove our ongoing million efforts cash with our then modest team sheet, balance embedded and The our positive to showcased streamline

importantly, most $XX.X program, for perhaps a deploying $XX.X through X.X% of count. or September in XXX,XXX value shares and to and team over return payable of quarterly repurchase capital million our fully share dividend million the $X.XX significant declaring the generated diluted per or shareholders Finally about our robust share

flow the point, a last weakened of This of generation environment defining levels even is market cash significant attributes. discretionary of continued Arch's one in

was across to high-quality, coal built In given Arch the type margins our coking for of fact, cycle. maintain low-cost healthy market in ability our and many environment, ways, this portfolio,

generate which the Of ability discretionary regard course, proposition. consistently capital this to cash flow we substantial return our to centerpiece of program, our also value the amounts as of key is

company relaunching has billion returned is that the return shareholders just of capital $X.X of dividend. at the period, shareholders. returns announced program the XXXX, inclusive capital capitalization I the of billion Arch That nearly ago, fact Since when present. now of XXXX Phase months just in more, of XX aggregate February approximates Even total include to noteworthy, the $X nearly program XXXX perhaps you now we've through returned in to this an market from

this fully today absent as our is have put buybacks XX% would the approximately Importantly, approximately X.X securities. And we diluted been share systematic dividends of avoid to the lower our move we in share the it expect settlement count than count in last shares. million it per more since reduction paying our convertible share continue share and diluted otherwise, forward. and to way, to $XX.XX we year, dilution of the than in another the addition at out view relaunch return $XXX million capital To program

As relative including weighting share dividends of the buybacks. program, capital return versus indicated, believes Board the the current

the company's do into so in the Board imagine, process its will might continue and decision-making deliberations you future. As share changes the and to including price movements in factors circumstances undoubtedly in

indicated, in which, to the view. to relatively markets, softened Global to have switch a constrained production is macroeconomic significantly coal and in continues recent be hot months. for coking metal host straightforward due Let's concerns pressures. our as of this The softening reason

As evidence hot to Association. XXXX world, production levels metal for down was of the that World X.X% depressed seen versus the in Steel excluding through May fact, according China, already the

margins the at at with market metric Even coal coking still support per product High-Vol the principal of weakness, A and that metallurgical coal, by At to was trade Again, the how prices this design Coast. of operations. East US trading is $XXX seaborne present, is our our this continues however, low-cost company built. at healthy ton

remain demand is principally markets constructive While due both in of new underinvestment existing supply capacity. coal coking the coking of our coal view, side years and the weak, in the

aggregate level. the of Exports past from despite the to and million six in the over coal States coking high-quality coking of years. volume Australia, pricing Canada, year-to-date coal year's constrained principal last X drop the Significantly, in against occurred seaborne United strong seaborne course market already tons are suppliers down nearly global generally this the

In starting pricing are this, marginal volumes. to have metallurgical current cost addition, with in Based weeks. metallurgical marginal there net producers the believe to US beginning move recent back that and coal is is pressure production evidence we closed pressure on reaching cost on complexes that recent exert two of price levels the

our and the a we greatly generate simplified and positive and and to the global gather begins position, believe expanded is to cash summary, environment our current economy industry-leading when reduced of ESG strengthened In positioned In significant capitalize steel. the net maintaining coal and our equally indebtedness extended capital well recent we've structure market well recover our global high-quality exceptionally value practices. products, building while our Arch coal world-class to coking increased quarters, in portfolio, reach positioned

of foundation with discretionary broad to cash strong with environment. to significant the on enhancing fronts these capability laid to pressing for durable range amounts efforts, levels of of position in value we've market the further. return of our and Through creation ongoing and We're substantial ahead believe generate objective shareholders even all robust these long-term capital and we a our the a

the that, call now John Drexler. John? With turn to I'll over

John Drexler

Thanks, good and morning, Paul, everyone.

team As discussed, along first the by with Paul Arch our stronger-than-anticipated operational cost as maintained result QX, highlighted excellent coking a quartile from performance, another legacy yet momentum just in segment. coal thermal

begin Let's metallurgical progress discussion core with a of in ongoing our brief segment.

the achieve whole on half million totaled will execution at ahead. continue To as begin Coking still a Leer productivity metallurgical the asset. to $X.XX year. quarters segment QX date, world-class stronger a note, remain sales confident $X quarter the first systematically that we up as of represented with, strongest the drive in to particular in for rates South's coal We production we through

requirements Let's did turn previously the in so the to deliver localized while addressing team now challenges significant even to our legacy thermal flow of geologic at Elk. segment, capital cash excess discussed where West and continued

total $XX.X occasion, higher the million, substantially which which segment to In thermal initially contributed solid delivering demonstrating acted Basin control degree, level was QX, and excellent some River counterbalance operations EBITDA short, Elk. anticipated. to challenges at than near-term West Powder rose cost the margins, the of During operations the to

QX. pace as starting and the expect to front, Elk On the issues usual remain be business West on in noted to back quarter to through West last transition at we Elk

Thermal Since over capital. our significant generated levels XXXX, $XXX billion keeping of to the while the As quarter legacy has EBITDA, in in indicated, a operations segment of from million of long-term continue fourth with total adjusted extending cash we in now harvest strategy. just $X.X thermal our

additional on Now, pass baton I let's color to spend for Matt Arch's the a our and marketing some and minutes position strategy discussing few results. execution before financial

a of for XXXX, As XX% of Paul our we coal demand coal relatively is of prices. resilience more have so degree volume production soft coal exposure in our second coking half committed coking despite coking the limited. noted, has At ably projected present, been than

fact, volumes XX% a indicated, anticipate In sales coal coking X% in in as QX. we step-up to

expect priced volumes we Powder for from and rolling As committed River million in XXXX. about Powder Basin Basin tons approximately million into XX tons River of our our to our while ship segment, XXXX, operations X Thermal

our we volume in to prefer volumes planned customers and/or While to year, for shipments. exchange price on we the would this willing work shift future are with as considerations

ESG achieved through give Arch's than let arena, of five employee critically time times safety rate XXX,XXX incident me of average. performance recap In That's half of Finally, better operations lost the the for a our first hours worked strong aggregate year-to-date. and important you an nearly X.XX subsidiary industry the quick XXXX.

At violations the midpoint zero maintained time, the compliance, water our we same perfect in reaching performance with of year exceedances. quality X and environmental the environmental

emissions of reports XXXX we report everyone a base efforts be our metrics details and our can our June, wide website. XXXX. reduction sustainability in on this in we the recommend addition, XX% to COX which report across which operations ESG since in equivalent comprehensive also our I call year published This the found have of on achieved range In on

by significant standard in extend is I the Wyoming we Finally, highlight honored during are that setting the the fact XXXX like the of on our was Award that. to I award would that doing of workforce behalf to emblematic for the and State sustainability Mining just for QX. mine Black entire Reclamation the and achievement. Again, of to congratulations success in with Excellence team, management my the On focused want the industry arena, this the Thunder

the Matt? With call Matt that, turn over now I to Giljum. will

Matt Giljum

Thanks, John. Good morning, everyone.

for in year's thermal quarter robust to over of metallurgical quarter. the of the and pleased second result flows with and Starting last compared EBITDA as for market significantly $XXX as was We to course prices the and quarter another both sequentially totaled weakened report lower are strong a million, earnings the coal quarter quarter. that both earnings, second cash

year's lower first a More segment. easy both in in High-Vol average it second metallurgical miss the ton last were per quarters, the our core than quarter approximately fact, $XX lower In strength quarter. to earnings, per of and $XXX the on recent ton however, is second When than average. the to A basis consolidated prices only quarter comparing than

period And than was XX% Compared quarter's production than historical the of average, in our XXXX advances average from higher quarterly to as fairly higher through levels. a this towards showing average. Metallurgical XX% approximately historical South XXXX metallurgical consolidated it XXXX, segment the QX markets, of was impact the target strong EBITDA the Leer EBITDA nearly specifically,

sequentially. second increase The And while that of year's over quarter first was Turning flow cash -- by year's working $XXX recall, as were increase the substantial million. this in cash was an XX% was capital. reduced than in lower flows to it quarter, you second in a cash quarter flows. last Operating

to some As converted that cash working than more $XX of a this was expected, resulting in quarter, capital of million. benefit

over to half XX totaled XX% the spending declared or Discretionary of Board with million, of August our the paid totaled September for has cash annual Capital and now the amount dividend our just ratable year, record per be spending quarter $XX guidance. quarter with the on for for million first share. a $XXX will $X.XX of stockholders XX. of Dividend on flow that

last repurchases investments the of back and were cash $XXX flow, efforts quarter second shares. and second on the our more including discretionary total credit deployed to we short-term XX% Regarding ended as over liquidity with of discussed cash $XX quarter's availability under buy We XXX,XXX we on million $XXX facilities. than focused call, quarter million share as of million,

reduce On to and additional million continue bringing the the debt during liability June side down $XX an paid $XXX liabilities. to million XX. of outstanding of the total less other We than balance QX, we sheet, at debt

reclamation $X in via mine at fund Black quarter million the million with completed nearly And earnings. we grew also of $X that interest final $X.X by reclamation Thunder. million thermal the We of

and to on structure count. capital Moving our share

reduced warrant half reduction represents XXXX fully convertible shares, first approximately shares this and exercises. of the including X repurchases diluted year-end count factoring have by million X% the to year, bonds, of in nearly repurchases our and That issued pursuant we For of total. share

We the forward capital reductions nearly and diluted as the year, the XXX,XXX the have we count, those to expect expect in warrants exercised program. execute remainder Looking be currently next of share to we on remaining over the outstanding continued months. return several

exercises the should count, diluted no impact will there be on count. increase those share the basic While

at but purchased of bond is we statements, have the count not CAP repurchased call of time remains the or reflected our otherwise call that CAP into while intrinsic convertible all financial million. the bonds, Finally, diluted issuance share The approximately remains fully value its outstanding. we $XX in the factored our

Turning now XXXX. of remainder the to

in last and maintained financial largely quarter. line operational have with We guidance our

a timing sales However, million Thermal carryover future to third Elk segment expected tons be performance reflect impacted reduced volumes our we West have into to in quarter, by From Thermal in the as continue to new panel. the additional we X the periods. transition longwall segment, perspective, will

full from a QX. in expect Elk We to continue West contribution

to wanted over year. flow impact of I out Looking remainder items cash at cash point flows. discretionary several that the will the

we of build back expect that to half capital benefit working the some occurred year first as the in unwind continue in of the quarter. we the First, the

influenced metallurgical hold experienced While assuming be in and of aggregate with working the expect largely the QX second line direction across would by we capital levels benefit will to be prices, current to generally QX, we quarter. prices benefit the in that in

efforts streamline $XX balance cash be plan quarter. million year. as part the of the ongoing in contribution our sheet, reduce a Next, this we terminating made of liabilities our will be balance funded, but well that anticipate to up we very will later is Plan and to pension final third

year, to highest with capital significant in Finally, be the for quarter. the in spending a expect QX down we spend currently step the quarterly fourth

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

Operator

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

Lucas Pipes

Good cost My first question the side. on operator. Thanks, is morning, everyone.

a So segment nice I the year-to-date year. of of the XX the down wondered, my And half the that. into you in a midpoint second are that maybe I step the to suggest quick envelope the thoughts and if million level confidence is for on little appreciate you back very targeting Or would would at met is of $XX the baked of XX guidance could your optimism speak midpoint? that? bit and of maybe there

John Drexler

range. for the Lucas, we're $XX-plus on Drexler. that guess ton is Yes, net John I a Hi cost, met the side, at this on year-to-date,

here at the sit of look and remainder the we've guidance we same. kept year, we the As

in in to in achieve the I There range, say back and be our mining. year, midpoint We as the expect of anything improvement half a that our comfortable volumes exact work see going quarter. is can't guidance. like to obviously, specific variability, we get seen through we're be the as we're to that. position to this This of targeting can the we've we're

influence the miner of continuous impacted Some by operations. our of this shipments from was higher quarter

timing about here Obviously, influence. all just we good out what the the the they and have of operationally we for of have cetera, year, higher structure. of That guidance remainder towards remainder there feel sit so cost quarter, have we're for the did of shipments, cost we to that a pushing that year. the some within timing But a down as et comes vessels

Lucas Pipes

met of committed. I guidance and to anchoring Thank you want very much, you John. have the the midpoint for That's second helpful. around tons the million kind question. the at stay question Again, on segment tons of $X.X X.X million

for to sort spot wrong the And there? delta I what I assumption. would you Thank front. assume, that the the get sense X.X% X.X% the wanted what's maybe would to times? into uncommitted a market out on and appetite in those very And you that's spot for go the appetite of between pricing is expect But much. what market achieve

John Drexler

Yeah, question. Lucas, good

book and the great with very out The sales sit in our team in we've a weakening portfolio, met there. softening here a the has seen comfortable and job that we confident have we're done prices. managing remaining we and today, as As exposure

for the shipments. qualities we Given are offer built that our the and we production, to we've today, continue got have there as that the suite comfortable we marketplace with with out sit that and the manage and of we'll here guidance our comfortable products, into customers

here influenced those today, will to of it execute team Obviously, market. we But we're continue achieve continue the and operate the sales. levels will as by to be that and sit comfortable

Lucas Pipes

from asset the obligations the of look retirement balance question I obligations, when last one side asset sheet, then, I'll then, Very fund When John. ARO at It's And million. fairly helpful. side, a I get squeeze in. for look And liability often $XXX Thank at I your investors. $XXX you, one million.

in So your this. that? could color very Thank the side? so, on that planned about the if if said are And additional comment you I what think for additional there on discrepancy, you should How wondered contributions we PRB? much -- that for asset

Matt Giljum

the Obviously, long-term Matt. the in you and balance funding Lucas, is that's this lion's asset of directed the of Black there. on Thunder what's terms obligations sheet the primarily that share for Yeah. liability. balance side on see the The that's sheet, the of

long-term But variety that of factors. One, work obviously, and flows. of funding is lot generating obligation with has a after longer no the it's that to a we're toward that because specifically, largest spent do will cash be because mine that and significant

life right to protected And have enough around sure the plants for sure uncertainties given the we're that funding in make that the to that able that. coal trying U.S. to decisions we're we long-term well to and we be make want of make with and

reclamation mines, that going continued ongoing something to be will to that an do that the to we're a have things on obviously, to basis, large Regarding we do expect and aren't the that, for other pre-fund we've those and degree.

closer Although, as change. really is funding that's life, mine Thunder. basically the the that get to for John? you certainly the Black But of could end

John Drexler

quarter-after-quarter, obviously, small Lucas, we've focused liabilities year-after-year, in a and very aggressively. we're mean, maintaining those addition, Yeah. demonstrated in I as on managing footprint

it's move along all Black Wyoming. continue the we did to I of Thunder winning our stewardship of award forward. indicated that aggressively It's a as think environmental from and along of focus with emblematic manage the State principles, that we'll tremendous ESG our And just team reclamation we as it

Matt Giljum

obviously, $XX the environment we interest going than The most forecast got terms of in we've to the in made thing favorable less make sometime when next ultimate ultimately from we last today, to of growing as to probably, expect of with the are contributions than that that when cash of that out. the sure be that need over flow liability more that a that that be do paid to funds that order mention fund we we is we in I'd handful place interest matches the level on today, work years need. the earnings have needs it it And much rate put would fund million the to we something

Paul Lang

you last of the out of think really couple that color, was years, last what you set the give as Thunder. I'd from address. reclamation has that's concern is I liability look back And Black the to the really the

a anything rest that isn't you are think clamoring XX-plus the the those that years liabilities. to mines there about do concern those all up just And out. about make difference, or If other of right now a

So we're about think where at. we good I feel

Black I it concerns, really is is put we've the to think think fund see Thunder good I a what the place. so done very in

Lucas Pipes

very helpful. Very,

So really of of if years. like dollars this over not of matter it I couple the right, understood next tens millions

it'd $X you cash that? Is comment ballpark? an like million would Or reasonable So per of a year. be incremental outflow that on

Matt Giljum

and I that we The to have is say are last year, not showed when We pricing good. would I that take we're where if that, reasonable, of year. like had last periods care only we times Yes. is very would to windfalls Lucas. strong, happen is thing have say afraid we

if could sense. incremental there today, where few more so were than modest makes were cash to try given maybe what put just that and over we we flows the we a aggressively next stand see stronger we behind years today, something think us periods And that lot to where move more

Lucas Pipes

appreciate comments best Very the Thank helpful. and of answers luck. and I continued you.

Paul Lang

Lucas. you Thank

Operator

Company. go Our Please the Martin from of Nathan Benchmark next ahead. question comes

Nathan Martin

my Thanks for questions. taking Hey, guys. good morning

Matt Giljum

Nate. Hi,

Paul Lang

Hey, Nate, how you? are

Nathan Martin

clarification XQ to Matt, on point But today? Thanks. said saying working can you it then $XX great. XQ of quarter XQ return. the and comments for I I think, your second aggregate should in $XX see you Are second just doing capital return million. returned equal about kind is start think you, the I you return is a around with be in way XQ, balance and I’m be the each million quarter with

Matt Giljum

some that Hey, may to I into of more would around back QX, that say up million Nate, course I year. that, end would the we're $XX the of It over of into in sliding the toward could QX. $XX expecting certainly may look we back just the million that caution the the QX. half up benefit which with half the weighted here of vessel way quarter, up shapes more end shipments timing does push to like

third timing in looking at it, the one-third in with impact I'm remainder in vessel big pricing obviously, and changes is could have way The more, it QX. both call on the a quarter today But that. probably

Nathan Martin

just But $XX to that would million it's of is it. back $XX half. aggregate of Got kind see you to That in makes confirm, sense. million what the an

Matt Giljum

That's correct.

Nathan Martin

the Got business. met on expected to the And Leer driving South then the Okay. down John, side of in post thoughts for where cost maybe Perfect. kind it. at maybe ramp? you over to of levels are Any you. the shifting

John Drexler

had and continued the up. Leer Yes, that we've achieving managing at since in South Nate, improvement Leer cost, highest longwall culminating here quarterly the in productivity South to ongoing see the has volumes started has

on the team efforts. continuing focused very those So, is

Clearly, would including levels back ongoing improvements we're the an improvement in half of with align of that Leer the South. that the shipment portfolio, expecting in year entirety the portfolio, across

the starting proud forward. So move and them to that of had that efforts along their Leer things for taking South find in room really they've and

Nathan Martin

And you longwall the kind mix back to shift coal the kind have half you, shipping I least you more John, the at year? would versus the currently, of would into see coal way normal back expect towards expect CN of of of a schedules of you while

John Drexler

Yes.

that agree As have. Nate, would the we year, we back the statement that just of coal I the of of that various would year we the the typical expect half play qualities with out entirety absolutely between split

Nathan Martin

port through And there? should price metric kind -- be about Great. fees walk very us mentioned math that assume the Could is ton get to indicative spot netback guys to kind also that of at would Okay. today. A of rail just the a you maybe we then price you helpful? What and High-Vol an $XXX maybe

Deck Slone

so sorry. Yes. Nate,

assessment. the you vessel, that level, delivered that's the in about that East Coast would metric a at ton yes, way is think So and US that's $XXX the

out dictated has was and out, contracts reason $XXX. in takes that been that the way down, And it, QX QX. you rate is by it for call to pricing rail and easy is rail again capped around in work sort the prevailed that $XX. capped the $XXX, math our the rate is -- Look, at $XX of So the

as average recall, A High-Vol in you And $XXX. QX, price the was

of effectively in we level, that we're was rate QX, at beneficial quarter because given out us rail forward in one down. at in So capped that QX going sort arrear us was that actually have with the to prices come again and

Now have the the prices down. counterbalances, come

we we'll a less get but So lower rate. -- we'll have rail have lower prices,

So that's useful.

you the million $XXX level take if puts But that kind to that that say quite $XX, at -- frankly, in roughly you then if of predictable. of the you ended the that's QX. at you And the we get where step go QX to in to the benefit down quarter. was we again, It's math, for you relatively is then run $XXX if from and $XXX kind puts should up where QX the -- some you

Nathan Martin

is roughly back of helpful. -- incremental the envelope kind high-XXXs. tons my that in guys math for price Deck, And net very the that's then you of Okay.

So I think that makes sense, and appreciate that. I

Deck Slone

simply the that we unpriced seaborne almost you shipped. from really, much the market of in price there's was Remember, because you we we everything column just not read really committed what but into what the saw can sort -- rolled -- into

price, driven and seaborne sort by happens going pro. in a as fixing So, QX because sort any the for basis seaborne the the to are very of is and in most it our of volumes real-time QX be what opposed price market, of part, to

shipped. became was really tons committed the with fixed that just change saw you they sense most the what but price real world, So, of the in were unpriced

Nathan Martin

kind you had potentially of volumes Okay. Deck. Got Appreciate getting quarter in into just PRB deferred slip more on out maybe it. side called last thermal then that And guys of XXXX. X% to the one

put that, be fully feel on point, this you at finer expected you've like X tons kind into guys of Visco XXXX. around you incorporated the like point Do You deferrals at deferred the tons they'll Thanks. the way a see market? PRB least million looks

Paul Lang

we're given kind will have thermal we of of value the additional market that the et the soft with conversations willing we or of kind as at if if have the to things, -- over we rolling ton opportunity, see building of years with, of just range volumes preserving where of what the market, between see Yeah, but we done the is that's comfortable at that book we year. has that we value work say, sure have through the customers price in job we've either of out in great and strategy end make see in us, price we X cetera, as we'll today, or look sit with we very the here attractive. volumes team place that Dave, clearly, a additional today, we where stockpiles, expect future we're now optimizing the gas, really tons the million given I that kind and things where they're consider pricing an now issue want to

years feel and at year that's real this we're how roll we future going play managing to how good So how as out, it and playing well. then is into

Deck Slone

book to that's through we've that I And out is out May, built on built like this. mean, the we opportunities expand just really, how that.

this as So customers long years. We're out built as we don't as a and view work with negative. we out our that's to incremental get happy how value, additional the and we've

to And like where out is we tons. ship and think we'd we'll XX so while million million shake $XX

As term, longer more long for value conversations. as have the we're willing to opportunity those shareholders creates

baked we're to have that's as look frankly, quite to significant don't a quite really Thermal for year, already it starting so in. a next position And again, solid segment negative. And view contribution as we another you from the

good it. feel about So we

Nathan Martin

committed for tons on you have many a way any want to you next on Deck, thermal year put how yet? number side the

Deck Slone

say but again, is year, get year where we if next XX look, that, a is ton are XX this to million to for not whether determined, can All I position going we ship be we're in tons million to would that's unachievable.

as So a and I to well. on substantial even book market a for think in declining, even XXXX we you continue that very good look, that's a XXXX that have tells start

fact, a solid for XXXX in well. position So a really as really

about good the visibility to years, react as obviously, the out to picture, really then and the demand in to market nimble feeling into and see get be whatever there we'll and So we're ready where you the fact, proves be. goes,

Nathan Martin

best guys. and second Great. luck leave the Very there. I the it time helpful half. in I'll of the appreciate

Deck Slone

Nathan. sharing, for you Thank

Operator

comes ahead. Our Please go Markets. next Katja Capital of question from Jancic BMO

Katja Jancic

Thank you for taking Hi. my question.

quarter, that Is and in last more the quarter. then for I still normalized XQ First, think was reach West to true? level improve Elk expectation a in fourth

Deck Slone

through to was issue. moving long as challenges that to at can what and think Elk plans had I had. we think Katja, and going plan. we as quarter, with be I of higher the indicated report, that we we're we last was doing of real have on we've communicating from West to to -- feel we quarter an be to the we panel area a the creating Yes, challenges a continue represented that wall our we're challenges manage here types where as the we and going sit good -- this are reserve that I developed the what we've that today, we the wouldn't we're quality, encountered,

the of get of conditions. where I in and that That next of team we kind the beginning and in play to expect The once great sets that that days. report done next move job, process better panel, process couple we're a actually in can up has again, get that ramped longwall

impacted normal the conditions by the QX, QX but issues QX. and operations be back normal as of expectations So and would in more challenges, to we've meaningfully indicated,

Deck Slone

the shakes have and piece we'll we probably look say, QX. And going see the did key where operating two a you that maybe And through panels. thermal whole, gut over of look, these Katja, to just in a the that at all West through here When level. surprise it's of I kind But We've But two about to out. is QX direction years a this mudstone. change just out the in we of because very QX. think right step different in as talk segment Elk from doesn't it these we're with grind quality high at Deck. this would had about quarters, XX

our significant any QX, contribution should modest expect wouldn't be on from horse. And the back QX another I look, we thermal change, segment. then in so And

in your Paul, versus dividends Okay. thinking potentially the from And you share mentioned are briefly relative then of buybacks, that XX-XX of I prepared shifting remarks, you think weighting weighting

Paul Lang

and I really including best to to both the we creative had -- fulfillment since curve, it's the billion shareholders kind the of ago, Board we've the COVID, development gone program and dividend. the think XX I we do which think, that offer commitment relaunching $X.X as to well has of Katja, South the by. months, just management made And during a Leer XX shareholder, repeating worth just nearly returned lot get of months following things

our In We addition that same in keep to cash all count you the positive mine our position. context we to the the return that, the that when greatly at and a by share balance shareholders. enhance to reduced reclamation we XX% We prefunded to liability XX% cut time liquidity. debt we debt and cash

capital is expect and most meeting as by value-driving and what our Board. every the out program the as as in of have And discussed return changed challenge point at discretionary our best should use clearly you capital. is shareholders circumstances ourselves well we as And

that of two-year XXXX over remember time had you of our we really through period. a shares capital we've period, buybacks, XXXX If heavy emphasis in on repurchased and about a the the return program Phase X outstanding XX%

now really as we're I of the shareholders to the comfortable that, from allocation an can tell think I billion approximates Standing both program, phases you which accomplishment with cap about clearly amazing our So [ph]. think returned program that today. market here today, is for $X different through given we've

is also Arch it think such underscores I value. good why

with So the that background color. is that and getting the all – I around file absolute guess

the we here that forward. the the to I message going expect committed Board allocation has and any dividends But program. play capital return still in a is significant role think buybacks to

would two weighting shareholder However, we in The same which our logically by the evolved. those change relative and envision preference token, adjust could scenario a the has components. that Board of circumstances

the sense, it the makes I need the to is react allocation time. relative appropriately. of past, it I there perfect be We'll it our we'll think solution the in Hence, of talk model, all no continuously. all times XXX% if think, for many Board shareholders And said that about deliberate. review will to quarterly. works I've As We

Q –

Thank so Perfect. much. you

Paul Lang

Thank you, [Indiscernible]

Operator

go Citi. ahead. Please The next Hacking from comes from question Alex

Alex Hacking

Yes. morning, Good everyone.

So you – mentioned

Paul Lang

Alex. Hi,

Alex Hacking

Hi, everyone.

the mentioned the a is like So of cadence you look quarter. Thanks. the that rest What ramp-up Leer record for there? South had

Paul Lang

Alex, sit can't I expected obviously cadence. that It's ongoing I influenced today, ramp, here know, think, into you just as we specific get longwall moves, by cetera. et

forward. way So as the segment we forward. improvement met ongoing we'll go And we drive for once again, move I just expect continue think, we that as to

Alex Hacking

Thanks. have much don't this, much how coal in half then the you sold Okay. year? of if the how I know disclosed but into Asia first you And

Paul Lang

So now, Alex, we into domestic as at XX% to that's a of into sales the going XX% seaborne guidance stays increased America. what is what for that Europe Asia North About generally do And the talk And into of there. significantly our thumb, we've market export ongoing of the goes that's market. into rule we It's volume splits or we is the XX-XX general an about about volumes Asia. American and probably provide. around volumes seen the right opposed going amount that South typically as

Deck Slone

We've a great particle HBA lot. excellent products -- The between high-volume that to talked we've products. I you it a lot about the really, bonding of presence Asian bonding that the Leer really we Leer the Deck. so talked our and Leer blend And is out understand Asian such I've market focus because disparate South unique end about that the Alex, Leer that promotes that they're nature a looking South and of a qualities the for of end amount and up We discussed. fit is our you're it. a all from plastics is and we've know fact better focused coke Asian all on the attention it And products the of product have homogeneous with using back coke market helping qualities -- building at our huge with because when things and oven much and they're it's more

be I terms growth in us. we're ton huge the Asia. capacity of likely million seeing in is Mackenzie is when also to in where to increase add, look we projecting where consumption going at that as you blast focus for and capacity, would is coking a growth demand And look, increase that's be, So going go furnace of understand you When market what right? Asian that's -- coal now is look That's coal. Wood an between to the XXXX at blast XX about an a in result on coking for where

has great amazing can be. market the be an of coals such I educating to going focus the the in there's qualities job, a blend. where that's fit done marketplace they us. think, for and huge So that's a why -- Asian And the team our And about is that of such

Paul Lang

an to XX-XX important to our estimate doing, ago of coal a Alex, very split for to the work that the the go amounts consumption of all area and exports indicated it that the into to secure we is going able they've grow customers that's forward. markets the real we there the to for going to long and they're minimal done, the volumes they've for wasn't -- achieve as as our been of that secure team Asian of once us had again be portfolio what entirety Deck

Paul Lang

likelihood. as higher where but XX% our going of going or quite sort go productivity market. systematic that Asian all go market. XX% higher who had that year we that's if said, total operate mean in the Alex, I and volumes next knows, to Leer going are of in volumes, after to would at levels, continues be those to but those XX% incremental to frankly, going be the Is the South systematic, all to say, So And so it's John expect increase Asian volumes into likelihood as it's to we year,

that good all trending. where So is again, feel about we

as going kind I a call, I finally, much the seaborne seaborne you then but cat US and market -- for of to the the tons color. price you? next a That's next where year. option guess, between amongst think Okay. for best that conference the a blast of they do put acceptance. was And tracked I on for domestic economic how head guess, Thanks. how into kind their flexibility you looking about sort market like not you thermal Thanks. to side, in I the of trade-off you do cut and large suggested steelmaker that just seems market significant that coal domestic appreciate the the pigeons have on year if were if into incremental

Paul Lang

is you to back start this that if you I'll X, on back Hey, want go weigh years in. other which to we business view or to others Alex, -- ago the up volume in in I ago. go the a left X not lock versus off, have to where off is some advantages. North buying rather sell on me, and long America. implications, the capital see but just this if this export. XX% has FOB ultimately Paul. answer, lot is has But excuse into has America cost to It's US go seaborne were and pushed South America ready And a to evolved, it generally XXX% what we and roughly past, we're willing North a an our XX% the Asia of American there time working more index less and Europe. And less if said the a with North quite on North in Europe clearly in we a in and volumes lot to, heavier as there's American in market. basis, we lot business. many keeping American And times we're discount reliance North market keep I've We

the Okay. appreciate color. I Thanks, Paul everyone. and

Paul Lang

Thanks, Alex.

Operator

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

Paul Lang

interest you thank again in to your ours. for want I

market to and safe free continue healthy, of Stay drive and forward see market across late that group ourselves that, cycle. demonstrating look the coal spectrum generate the October. differentiate further in entered that the and to we broad reiterate can While weakness of amounts Arch highlighting was the substantial call, cash we position the an a With to conclude even once everyone. and our coal patch, operator, current we we'll to market I global again want just coking Indeed, by a to conditions. flow built opportunity has soft such low-cost for as reporting

Operator

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

now may disconnect. You

Arch Resources (ARCH) 27 Jul 232023 Q2 Earnings call transcript