ARCH - Earnings call 3 2023 | Arch Resources, Inc.

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Operator

Good morning and welcome to the Arch Resources Third Quarter 2023 Earnings Conference Call. [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

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

be me including that expected Securities statements and different performance let during statements future uncertain. Litigation begin, statements degrees matters financial call looking that statements this relating may nature Reform we Act.Forward remind the by certain you made business according looking Before to forward their Private address considered to two our are SEC we in may than in which our the more annual filed are with reports quarterly those statements. uncertainties results the These future detail that cause different actual to our described and materially in be forward-looking expressed of we like COO We of remind can participating be of you our this our Giljum, in the a new discuss a release, do forward-looking you except measures reconciliation John Paul to update copy events section find website CFO. result the of future plan our press Matt morning, also a otherwise, or we have our as required call to not Drexler, will information, be posted to as our CEO; this that that morning's statements non-GAAP undertake of our financial at the may whether which law.I'd and Lang, end by investor on archrsc.com.Also After our formal remarks. to to questions.With We'll Paul. be happy turn over now take that, the call I'll

Paul Lang

program, preserving We tenant creation that value adjusted shareholders, million the a made Arch's integral cash that an of relative nearly discretionary to returned flow than cash the consistent and dividend which as Arch the Board the pleased endeavors we've market value the important return invested long report you with strategy. our value of are down here Board XXXX less the $X.X million payment direct of share.In repurchases share ratchet the We of our time weakness. Thanks, million the model cash ensure meaningful forward shareholders the in period, to generated to long in Arch's Board which us is periods on in $XXX.X return that at Deck concluded believe $X.XX to of a driving plan towards a Recently, phase and of components balance repurchase and evaluation that combined reduction most of of served same team capital to is can shareholders of It's Board dividend the diverted precise XXX% and a and a finally common unambiguous form we the good highlight time to million issuance the the on million significant morning. per continual a the equivalent growth.During during of and Since be return $X.X yet shares capital program in term it adjustment be process, continues morning, nearly capital that plus reward through to cash discretionary continue the we've clear, actionable for your basis cash of the $XXX the capital decided interest long-term short, we through could Arch to as ended, to to view join glad their sense view commitment to of quarterly as confidence.But optimal I'm of EBITDA function Arch's December.When shareholders this of returned evolution allocation key model inclusive more program, its capital to just repurchases returned objectives, to that in capital shareholders. time.As percentage or of which underscore the a dividends, for is drive view with call now the convertible sense ongoing the note X to million the and our the February $XX.X present, the continuing we return flow the everyone. Arch Indeed, team the including QX to again, our and flexible discretionary that the central of makes program that and third model, flow deployed capital appreciate larger as view XXXX simple, progress the $XX.X effectively to achieved the term shares, of shareholders. the ongoing of on allocation made XXXX, in capital X.X centerpiece contrast, directing in weighting Arch's ongoing program company's program's the than dividends, given outlook evaluates the to promising way way. and more support billion to at the commitment allocation and believe the declared foundational be to or result, proposition. XXX,XXX billion return say We an quarter a $XX.X during to the at a share repurchases, manner is preferences strategic of quarter structure.In cash is that this be stock to dynamic. during the more while

following level markets we've in price United metal, coal coal, coking X dynamics, coal exports roughly A demand almost majority million and their from a coking coal coal weak in other recent strong the to coal significant to seaborne coking market XX% in decrease heading these XXXX. are Arch's the the $XXX off pricing tons coal of East largest market, product XX relatively seen is where nearly steel coking XXXX.Meanwhile, years. markets Year-to-date, tons coking recent Canada, to output per continue continuing XX% metallurgical in environment.Let's States, at the a elevated vast States that metallurgical Counterbalancing levels XXXX over despite in despite metric levels interesting indication strong market that to are an of Australia, year-to-date, million decline of is global persistently this sources seaborne is of watermark from the weak prices high-quality is more of Coast view trade for constraints of and range supply. the United with in end hot remain when or supplier in continuing in by roughly macro strength bound weak environment of market What's our high of the the already at undershooting coal coal supply global averages. an the Arch's exports principal dynamics.As weakness, degree, historical compared use global large the to High-Vol a despite assessed now relatively to major which ton months, down being start Turning weakness the X% a

no tightness concerns, investment of mine a muted a repeatedly, modest capacity extremely we has in that years we near ESG-related supply see noted conditions the last future.Indeed, global global host into drive costs, new been we've the of changing development suspect additional the improvement and due future. macroeconomic could in well evidence and in several that pressures the even increasing regulatory other and to existing As mining

demand As counterbalanced with for a similar years the lackluster of we dynamic by seaborne thermal being markets, see undersupply. coal

substantial our levels XXXX, value While expect we export to call our on laying should durable dynamics prices for flow continue well effectively to mid-cycle out volumes in pricing support their stage long-term persist current assets further for are and and a support as ongoing Through strong and thermal ongoing for XXXX reward to over they margins practices. turn foundation program QX. in future, and growth capital sustainability thermal performance sold for beyond.Looking fixed our Drexler and and well seaborne ahead, position, augmenting We're and sharply confidence markets for creation thermal return setting we on quarter-after-quarter advancing market through expect as discussion coal delivering to in maintaining on excellence industry-leading constructive operational and the generation.I'll what of into remain efforts. focused John operational cash and substantial consistently improvements already year-after-year, we these shareholders our financial our strong capitalizing be the now our our John? free the at

John Drexler

everyone. and Thanks, good Paul, morning,

Arch discretionary and Leer during constrained flow discussed, cash quarter. despite third advance at Paul results As South in the solid delivered million just the $XX.X rates team

segment metallurgical cost for foundation year-over-year solid despite a continuing per maintaining higher ton portfolio near-term that, the also a its elevated results while flows we first structure coking basis. for cash our excess of supplemental at stronger roughly of basis, segment short, a sequential core and a want requirements shareholders upward realizations delivered challenges to delivered thermal to talented high-quality Our our on expectations trajectory In and metallurgical highlight as U.S. well continued quartile relative Elk. coal cash operating comfortably addition, while in the capital workforce some margins producers.In in breakeven of us the in on address portfolio laid deliver the to significant and the value performance even future.I West stronger placed

of track worth by reduction, this Leer of move these year coking But on operational the execution in this continued around highlight execution driver our X.X that less Arch would to expect Again, on industry. push team our is a expected with on that's step that approximately outlook in step First, tons guiding XXXX. substantial guidance. year our of the the midpoint significant per as fully drive metrics in which average to XXXX ton further costs we improvement that momentum than did That's segment positive cash an coal we to XXXX, a to I lower is most XXXX.The face of be upside in than both noteworthy guidance, we continue the the year more inflationary going $XX clearly ship progress at even it's across cash than to primary behind full in into of aspect fact midpoint that costs million finish pressures the costs followed of want forward.Second, are X% underscoring the in metallurgical XXXX higher is we upward the change in and full the particularly up based South. at key marked

Let is per good today million a at year. mine me run approximately be X clear, tons Leer very South current rate of its

and we Coal, which at that should XX% Leer has coal should stronger a of most longwall significant have results district. enhance program should greatly we what the the we the will Of as expanded we picture quite incrementally mine strong is a on enhancement. plan. mine our greatly that into that potential second drilling District down what yield. seam X transition contributed less contributed that XXXX in is ability to it wear time, obviously, in capital that During South our tear to have for in of has $XXX level the from achieved the more it rock rock, which operation, ensure to operating be million.Moreover, of years have of the million is X EBITDA costs and the an coal geology, a have order against we less reaffirming that At long which become But X.Patriot means great expect the significantly the same XXXX approximately in what equipment, we its is expanded drilling track believed of initial note, cutting And contribute be than cutting Leer in optimize step on further to means segment we productivity to clearer greater XXXX. investment $XXX improvements is and less particular thickness on District drive XXXX to first exciting program to

the Of South the we positive quarters.Let's the but about even negative, outlook confident for now there both shift and remain higher enthusiastic and in Leer gear into is segment. and coming minutes the a few discussing surprises, potential course, mining, its is to potential and this spend for always highly an thermal

River Powder assets substantial solid level QX effectively Basin high cash margin. resulted while a to the cost a at managed Elk has contribution delivering turn, performed in once as a The news This again West indicated, As execution overall back a in in they is progressed and which, by into that and coal. and new in performance reserve now is effectively area West good the of breakeven higher-quality generation, counterbalanced thicker Elk. strong

in B promising.Now is higher. QX, up for American marketing thicker and starting outlook While the shipments is we let's coal coal in stronger short, the which In remaining signed from of our seam in efforts West discuss West the is and missed much West coal is high-quality, we recently contribution markedly very and will for Elk the substantially XXXX.Then mine a expect North one Elk, with low-cost transition QX QX throughout endeavoring quality [indiscernible] few to commitments. coking the Elk of make the the the our course are longwall mid-XXXX, of some in where QX, into still

in to Our successful American customers, average coal of fixed marketing tons outcomes team ship to of an we North coking positive price ton. in X.X was customers approximately with these and several achieving million XXXX have committed $XXX per at

site.By seaborne same stated market market less for favorable. well of coking pricing have many past, our into the when appropriate we are an American in the to value our high-quality place when move index secure North of larger American volumes product and pricing into we to equipped the are we token, coal are at the As price happy the use XXX% we dramatically North times volumes dynamics can

that the volumes the the thermal our of operations house, output in we Basin with large for moving Powder the quickly are side We be status success for of directed market.On and are pleased pleased with percentage American placing North in XXXX equally delivery sold-out will our into towards River XXXX. seaborne XXXX our in

pricing. We virtually have also X/X all the to tons export XXXX with tons of approximately for West those exposed placed

top the total an industry approximately so employee Excellence X of quality across time X a average. the X.XX deliver to again am per first Arch's the marked report community recently the engagement. and Interior wide the for range nation's honored of during subsidiary rate third is hours recipient in time Department of that months Arch's than aggregate operations subsidiaries greatest an Arch's achievement also time, violations operating sole the worked, QX.I once been As metrics.During XXXX its Basin single team has honored. ability same in years, always, This Mining XXX,XXX is lost which sustainability Powder XXXX, excellence of water Arch subsidiary achieved Xx Awards, Arch At Coal have exceedances Neighbor of continually of better the the Good environmental X honor River to the X the proud recorded has U.S. subsidiary incident

Safety recently for Technology for now to Matt? team, our behalf on Occupational admiration sector.On entire management In my honored Institute additional Safety the Arch the for critical of to for National of with and call addition, turn express Innovation mine some the Health an area Mine Award for Leer want workforce the I the Health the senior coal and I this efforts in to tremendous over absolutely their appreciation that, Matt will results. color performance.With the financial

Matthew Giljum

good Thanks, of John, flows and morning. discussion I'll cash and begin with a liquidity.

including totaled spending capital quarter, timing For in than as of receivable.Capital lower the of million, towards just credit the million, with $XXX net flow which total to the facilities. XX cash resulting totaled and million a the benefit was $XXX Debt at million. metallurgical led capital quarter flow and $XXX of $XX increase anticipated $XX end short-term investments million, of cash growth September and included in in quarter over third of liquidity accounts operating was We under benefit cash $XX prices Working availability the for additional ended million. $XXX discretionary cash million was the $XX working quarter shipment our million. and

the While position, fourth cash flows. ahead sequential clearly their were cash years it noting worth a expect this lower is improvement range.Looking quarter, financial the our level at to and of in strong targeted in end and lowest liquidity is operating we X that at

anticipated, what point, spending be similar in As expect quarter the a as fourth with we be net always, line third the to would fourth magnitude in by working planned not largely quarter. capital with at Capital trends quarter. the with in delayed spending.Moving we roughly capital now in But benefit QX some experienced expenditures pricing. will determined was we CapEx third anticipate our high this We to into QX on quarter had as structure. to

share total of diluted a We at of exercised settlement, remaining the repurchases than virtually more reached beginning share completing share of the year-to-date date share. of first early simplifying the the included process all the continue milestone warrants On impact purchase of over as the a their that comprised the both our quarter convertibles to early the million basis, we with the in XXX,XXX at year, per the X.X and structure. average significant in just October, the the repurchasing X and shares overall count quarter, count capital represents an At shares. price repurchased of the shares importantly, repurchases earlier the diluted this expiration were year, convertible X% under $XXX convertible nearly total bonds of in time. diluted by beginning outstanding.Just year million We of Combined shares total bond reduce now which third remaining course the October. warrants, final

but will As on between share no has we diluted our count activity material increased expected, believe be warrant share count.Moving basic difference value. diluted the our this impact simplicity and the count, there had forward, basic and minimal

return financial issuance call not repurchases increased our $XX time a call remains remains that in share amount million, value as purchased claim and that As factored well share convertible per everyone production as program, shareholders an into I remind the count. our at capped approximately long-term diluted the earnings outstanding. of the The statements the that we underlying will growing the of we fully of share will or reflected bond intrinsic in otherwise our our capital is over growth dividends weighting under capped have time.Finally, to

comments prior exercise date its elect to capped the cash the the we that elect I date, program. turning to XXXX either the time.Before or for maturity wanted of final return fourth ability value call shares. have the to before to over the receive the and questions, at the call quarter receive make would capital some can to related exercise We amount If is fair to in on or we maturity

Board and Paul dividends, same the cash cash quarter warrant repurchases, declared on over demonstrated which proceeds on call cash slightly December share as The First, mentioned questions. on our our XX.Paul this that that also dividend the nearly the to commitment net over a discretionary to period.With flows. dividend per third ready mentioned, totaled XX will thus announced $X.XX take of returning year, record and stockholders $XXX we based of have year-to-date, be November paid you. to commitment. has dividend shareholders, are that, will million our exercises combined convertible is to actually I than repurchases the Operator, turn share from of back more time today, Including flow to bond far we

Operator

The first question from Instructions] from Jefferies. comes Chris LaFemina [Operator

Christopher LaFemina

on a Just framework. capital policy, question the the return

to So dividends where is be do discretionary the expect targeted we be XX% of the think cash of price sheet or say now you cheaper have did flow accumulate used of for flow to to depends portion can should would sort time? if what So entire up cash that on cash your that, to that or shares you buyback XX% get And discretionary you maybe buybacks. on as is? and later, XX%, balance and that share Paul, in we of XX% you used buy that an real for will opportunity buybacks

Paul Lang

first it's And to we at little announced, responsive is is, relative a as we do foremost, return our and expectations. as I plus be as be look, Yes, weighting, shareholders change noted, responsive at we'd it's be and or try successful. this And opportunistic. more in to program, we hit like change just more a that look think lot what been the a of little which the a very Chris, I capital look

selective sheet a smart And see in situation goes we're returning I a hasn't a on build look hit over little time, cash is And of how bit share in going program to do the could think way down, market to back of we of look, cyclic more We're the it. when the when So changed. you strong balance shareholders. than it's markets, cash the I of think thing do when just for heavily. fundamental those little we'll business, it. But where we'll be a we repurchases kind a I hit really targets to shareholders the

Christopher LaFemina

Right.

buying you today So the let's about on message I we is potentially the that guess you're if value balance the do I in mean it the or is your a position, it and overvalued? about about the what it question is than that to price kind weakness, is on assume buying follow-up sending worry stock question Does share I I strength, that not the is point that where a higher XX%, of market equity. a the that about understand sheet. message XX% sending cash you're real in your accumulating [indiscernible] worry on sense? on but make think Do

Paul Lang

talked one quite all it's makes a market think it in No, times. the I that we've bit. see probably you'll sense, and about at be we'll Look,

is we at heavier I think what may some we'll though, others. be do, than less times and

to the And at at As of had think in nice that. quarter, couldn't take share to be of what the to that of at I we're time. was just advantage QX, the to and look jump the we trying when start of is looking XXX able end been at to in it I around blackout price here But it. bottom take were spectrum XXX we back advantage the last

to I quarter buybacks. the next. look, is, intent it return we a share as said, wouldn't be we've cash and So allocated cash for one to surprised. use share the We I the buybacks, on little ultimately that But build

Matthew Giljum

number of that it's you're certainly I not always question the with where little and bit been war understand to very view Chris, that it can useful, would but part chest, concern. note say we it, but the since same piece a big building a the that has going formula preservation capital the probably enough of be beginning, a

Operator

Jancic BMO Katja comes Capital question next of Markets. The from

Katja Jancic

more at mentioned next little Leer to could expect you the about what production on South, the improve I you production actual think Leer bit Maybe be a year. Can South? that talk you

John Drexler

Yes.

we've of South recently Leer driven and some that challenges, X, panel production It's here expected. in began that had. we've the some coal mid-July, the we disappointed that geologic the most reported Panel we've with the by of that not challenges in we some mining thinning as was saw the of with we been experienced seam of the So been

XX% height. a is that at a X improvement. opportunity to really we're a District the head see on in Leer transition X meaningful District quarter, seam heading other X substantiating production we an where which those X, and -- of -- out we As as levels the finish to at the tune back think annual of panels around X geology be that we or see that and we of annual XXXX, as here would approach that move saw pace X-plus going I'm would we're with though, Where mining And that excited head we'll expect we into in X basis.So improvement as better basis. this later the coal result, volumes into the million, we us District to and panel, how We're in occur forward. We of finish into in with X district we're District we to type put panels saw on into into drilling. kind get we the mining X remainder us a we comfortable see expect an we on tons million with tons transition in look million would sorry, in of we

Matthew Giljum

than tons a reminder, very and million per quarter for more produced at which rate. that Katja, is run just Leer XXX,XXX on QX, QX we much ton in X And that track of South, sort as

we back So sort be expect XXXX. range in of to throughout that continue that to

we'll we're for said, to of be transition as on we John look, QX, Panel then quarter, about half X, it this and For and still in just Panel X.

then we're between rate and -- since somewhere probably in XXX,XXX a be the more to look, And Panel to tons like really just QX XXX,XXX QX Leer run in I not that John think to said, panel that we at quarter. going in ton what where part sorry, South mine. It's X panel low-cost tons expect. for of year, expected in is So It's X highly mine. to is X million produced as we reiterate, be good per it's just productive It's a where mine. a XXXX. and Again,

Katja Jancic

what should say, X tons per million be And the cost year? let's at,

Matthew Giljum

As year we is at maintain at not improve midpoint puts volumes even what cost clearly, as million we segment, to move we've for guided the the look X on cost forward. and able $XX.XX us Leer Leer structure we at that into some improvement to a to think hope improvement XXXX -- quartile the I at our ton as with in if South, here South, be go it overall at expect structure. net a XXXX pace in first of we

portfolio. great And mine, so, forward it's a we that to get to good the and in go it's going status as continue to work to

Katja Jancic

Okay. gears PRB. to maybe And shifting then

Can mentioned you're almost what that volume a pricing I sold and what next is? bit you for you think about out year. talk looks

Matthew Giljum

Yes.

of XX-plus in volume So River operations, and Basin XXXX. that as Black at as wrap Thunder Coal Creek you look million kind we're Powder up our ton we between

see that real pleased from the may we've with with would a it be we're small level seeing been we've we pricing in shipment associated built, as reduction reduction, here that XXXX, that responsive into step the book with book the a a perspective. XXXX what to levels we the currently As market, from modest be there being but

what seeing be here different in We on from front, still different significantly the XXXX. we're haven't through given that budget wouldn't that We're -- working but guidance.

John Drexler

very same generate we're assets. us, PRB our significant the margin what still still like the a from XX% We'll comfortable market And the We'll year. Katja in the that's as market that at overall is we've requires solid cash per We're sort of pace look stepping assets. maintain at from of down that very expectation discussed, good PRB comfortable something probably a steps level. down if

fact, Now gradual the supply over for changes again, decline ton if, fact, much that way and in in in time But more market prepared that level. very maintain XX reduction some to of if, of then kind prepared million a to pace. continues we're

Operator

next from Benchmark. question Martin comes from The Nathan

Nathan Martin

like potential It Just year coal on of range? before maybe my we think South your growth of get do low get we looks full of about that Leer should in Is Is Leer midpoint or performance? South that the in to 'XX move of for the coking thoughts to would Based on the What 'XX. math, second end side. starting then flattish kind it your lot shipments top But great of step there. the guidance. you longwall And logistics? kind that be drive it shipment at possibly it a you improvements to about change XQ just coking talk district? into how could coal

John Drexler

No, Yes. good question.

I it. volume ability year, and to remainder why of a look the range think guidance we combination have where achieve out into we're we typically of that's there with as to production know, to have that guys and it's we factors comfortable there. all as But is that you ultimately our that out of the go logistics, that range the going

you've above should that to ton you our kind year into As South Leer got see a that going X-plus with be run comfortably million year, X%. expectation that rate, next step Leer you're of in

a minor operations, Beckley year X Laurel continuous annual You've got Mountain well and tons million an executing at X other on the basis.

into X yet. we growth at with the comfortably process. as But And provided into Leer further have into ongoing we above think not I as 'XX. get 'XX budget as move the in should tons guidance look X we we South. then midpoint be We with million District We're deep

Nathan Martin

quarter. side bit Appreciate And also thermal that, then John. a modeling question for fourth of maybe a the on

If XX would but West million Elk, fourth big that I to the sales. I I year, full there? pretty update assume X.X% down something to close thermal think that or previously me of I the XX roughly in or million so missing guys so imply about PRB you for shipments a any correctly X%, thinking Am step in I guess quarter. said you're excuse tons

John Drexler

on thermal So XX the showing I guess side guidance midpoint the is tons. million we're of the that

XX tons Powder in XX You're Basin. it, million at, call River million the

tons. And then X that have got thermal in, table, around tons You're that you guidance is that on you West we kind shipments where be. million, the so approaching of probably side, to expecting million-plus we're XXX,XXX in the to also mids the Elk basis factor think million X which tons, number I at at at show described we've on least X that

Paul Lang

bit are going in or I Nate, where guidance. sales we last that things you of always tons. them that's little little same the And that's it's couple thermal And below anticipating what we of in back, earlier our just you. some one thing we're that to ask reality side. confuse We've on And guided the the the look bit for of customers happy a we of the you've pushback seen what I or as same seeing think to a the accommodate were quarters. the achieve thought more. long rollover said, And quite with year value as as we're if

Nathan Martin

a to maybe second. with it. stick you What guys. And about level today? take versus XXXX higher-quality look that that, West like like you're another more in for Elk production in that production Appreciate does run normal Got hit It a could coal. rate bigger when sounds just maybe John, step-up talking then curious,

John Drexler

Yes.

the million, XXXX, the So and quarters, coal reserve. We've level. great and going into X better year X to is be continue tons things itself to It's as few West as have panels as expectation a and to great gotten the where we at West markets, on the into we're step to there. ship challenges at had step million seam district X/X we opportunity And we'll some about Elk, another those. an in up then going is export we as 'XX, got longwall well We Elk the out got that should million Sunset back moved seen well where X those that Elk that we the are we exposed getting of the further in We've we market. manage Right around area to received. access things. year still to of X.X we've that markets. Elk, a next coal, we The through a need volume to transitioned opportunity we we look consistency West annual there's manage West coal's a the is ramp we you're more it work up has think, tons quality volumes moves first of at our that it thickness that to excited approaching The basis. levels B Elk, with at But we from in now, is West and in ton that. as before that quality international to missed into the forward.

Deck Slone

step-up said, at to seam pound. is, appreciate And a better BTUs The you're B XXX quality. in per BTUs John as of XXX looking

appreciably So better Newcastle step-up and of significant the than quality. sort

is that's as the to Newcastle higher in it to in us already aspect opportunity market. potentially better is tons, the Newcastle. make much but gives above just not that back even going really attractive So that only sort Elk, that coal at move million seaborne the and fact, X it's John than another like, quality of little look thicker, said, of to that West And good also more a a story,

John Drexler

good a we as advantage, all I West seam, of based pretty view up markets. what's pricing the very mining what's we we've a in It's particularly into B company. Japanese And exciting. is, goes it's the the lost the Newcastle long-term to going on in Yes, considerably, experience particularly access as said, really got seaborne of Deck is Asia it lot at and say a for B a and lot seam. And when down think really gives to the it this get asset Elk I product, market, quality

Nathan Martin

may, of leave if just $XX color the kind midpoint. What's want there, more. out. CapEx to driving I And one the I million guys. that increase, about Great at don't

you I fourth the to CapEx carried mentioned there in think, some particular there got anything Matt, quarter, is note? but

Matthew Giljum

Nate, we've just to as is supply when we A it timing of John not things lot just that is And if with are the I'll is it he's obviously, was. chain easy chime some of add. A once timing. that, things, Yes. lags anything in receive to seen of trying as those to arrive, certainly got going when let predict of really lot

we we sense equipment next The would I expand year, as bringing to as we is where look the makes mention into opportunities into XXXX are trying to additional other some on it frame. time go find thing production

John Drexler

Yes.

I think it well. Matt said

get a predict can when in XX that out, is XX, lumpy to they're to are difficult. months time exactly little You here when you've got lead some come going trying items

got. it get of place. So we some stuff the we're in We'll get glad to that

in in move as providing we similar couple years be future specific not seen as and to discussed but years we forward, the I think what CapEx last we've the in past, we're we've would expect yet, guidance to of well. of ranges

of and So how that good we about we're forward. kind all moving feel managing

Nathan Martin

I Best fourth guys. of quarter. Very helpful, appreciate time. the in luck the

Operator

from Partners. question next The comes of Michael Dudas Research Vertical

Michael Dudas

consumption though what XX saying? plants how think would be to PRB look given appropriate for some your grid need mean the plans you been, about U.S. diffusement been what -- maybe consumption are reason. Paul, retirements that us the been the relative reclamation, of stay and outlook everybody our assets. your maybe have utility X type coal, you I plan other next when very what there's So remind I years, talks to do But thought instituted net [ on a cautious over your over to there's even mine can ] you and has it's to on customers for thermal or regarding at you -- next

there is chance nearer-term recognizing thermal maybe some a cash want to where of cautious years the expectations accelerate future those on your your given maybe flows you plan be that can some what into is of thinking, right that now, you demand? are customers on So

Deck Slone

cost back of has where But team Powder were know, of a declining they've managed Basin out margin an of way tons the and really healthy as the very difficult business maintain of the a volumes profile shrinking proud in things done the the cycle, those plans have of Powder as excess that go, on maintaining downward. the far, annual mine managing Michael, that going in managing decade few job the to hard managing our operations. The that being that and focused others the structure, basis.So River It's predict XXX job sure you generate costs we we outstanding where trend footprint. I'll in Basin in very is environment. a don't through margins position an in but effectively well as to modifying on know, the incredible go continue I'm to been still declining. We've million to production here. decade, River to team And plus, you start in. those to are an mining market which, you will weigh see and done cash.All out have reclamation are maintain is that the team in we

the equipment we've closed You some operation proud team modest economic to still of the we'll frankly, at XX% fully we Creek Yet there as we well have in themselves opportunities can essentially team reclaimed we've go. look to fleet shrunk forward, be to would present with market, production optimize where and we go makes down and the essentially real quite on it.So execute types XX% those responded of may do it so. we of very fully Coal of the roughly that volume there. where those sense that the that of And to to. opportunities prepared as has When kind be expect

Paul Lang

have PRB, I I as I Mike, set I at up we're view. the well. relative think positive look still a mean

fairly dropped line. and kept in in I our is think cutting the good very key We've flexible. job as we've to costs the PRB production margins of being good a very the a success done

And The the just the for us optimism easy pretty still option in there play real of success a thermal the a clarity and bit I out there. mine have set future created up operation. for it of the And out team I great going careful about a done at little capital job, end key has reclamation put watching the years. think has to well. We've forward, same, we're fund But feel Going being good. to good we very the got in. day, X pretty and the costs to be is next I the

Deck Slone

going the that. but there's where we the for it's low. we Mike, end if of are a continue does look, get sort advantage And domestic natural but a get fact is are bit to a still it is plant significant ready the continue of Deck. prices absolutely a to that that stabilizes, year, market.So the age, in right is results, fleet remain think now we Yes, of we decline, of and coal to we systematic, But the gas time closures those steady fact gold period plateau we're market taking each seeing that. still We're prepared

for have decade. for still certainly As can plus. in next we years prepared believe Paul say the think end, right we to appropriately is the over we next But declines X now, we the said, what you continuing

Michael Dudas

to I might is sense a with Those production iron Or the momentum for has sense is is down come have of group base last your -- you reason what of supply observations. that? a some or several quick your next Just steel you. into lift? that. year, on pig some year in the there more midst seen? is prices, because there's just requiring looking maybe or of shipments the get how the limited for Paul that Or customer great maybe And your there we've high short-term a come coals. of marketplace better the of you're that the some of export that, reality Do for at follow-up, some a volume this that some met nicely next are that in the appreciate expectation the weeks out some you my risen coal here quite

Paul Lang

sector think market follow-up head. in supply is all current let that with There is its the the rare you The contact mentioned. really John direct tight. the Yes with the it's is above but is that I customers coal underinvestment no under of more I'll -- question the in very

on It's was I As couple customers production XXX held in We're good value it side, quite what of requested in this year, for happy the mix bit little to think about same XX%. for were a also understand would at is at coal at big us North were a there lot there's looking on that hope being X, was not Last those years the These a with and with coal X, to ago, comments, prices. American netback in last prices current far down like a levels. shipping think look, of in steel for be last And as do year. discounts about is years. XX we particularly It have been noted North the at America the I willow to the And ended XX%. XX% if up. as And structure. logistics. settled, where is our X% going continuing said we're counting that of dip my But hot up. we you time, it. us, down But we're the North good X, this I exposure. macro year. saw cost very are this we've prices extremely our what coal American but is year, side, down it's

John Drexler

play demand to that be for frankly, quite going near supply, got out Paul industry both it that many one term, decades the how of seen the that challenges just world here views on continue XXX% look there's come. agree So faces we've here announcements that's Michael, you is just across I -- going for drivers with as so something the to even and around the the to we've challenges and the biggest recently clearly, you see of then comfortable in our term that longer steel to at for

in and continue qualities that, position puts deal value puts use feel markets market, we efforts those about think us the and team move the And we thing getting our with with us product Asia international forward us as to going realize product, then we I our the benefits. of such product well. those our proud our forward a markets the allows that for and I'll new and one that in marketing to as add as blends customers of the into that the there, that of continue getting good customers, real in So in that.As had they've success us the very especially

things So good going. with feel are we where

Deck Slone

At And production Deck. you to start down Mike, in or certainly prices And I look, that drift so. level, see some that of level is that that it's around cost I at $XXX -- saw would support HVA that which actually we suggests to there given would mid-July, mark. rationalization, $XXX marginal add the

since can Coast out but at feels you premium level.And and bid, a more at it level support we've of perfect, PLV that and some $XXX. in we're higher Australia period that. Interestingly, of not that's that good then, below obviously, $XX time, dip certainly for there's is fact, the jumped that than Queensland low of and than like Now vol

suggest $XX isn't is PLV between need a now, over to is. a spread. We has that $XXX not been X typically number. number what higher and than that. a right spread It again, HVA great So But don't $X the past years a

So to can there you minimum of differential. close sort think that pricing, constrained.And as pressure supply that of the sort highly that we there's still see is said, at opportunity on Paul the

seen. market seaborne Now just remains to has in the $XXX. the over that gets been price also, that, a And -- average look, how the since reminder XXXX, be closed,

underinvestment. constraints, So the regulatory the the again, the I constraints, good in think supply we various ESG continue around to jurisdictions the changed of and see has a pressure because world bit

term. constructive we're the So on pretty of longer sort outlook

Operator

question Pipes Riley. Lucas of from next The comes B.

Lucas Pipes

DTA. first My question on is

the One wondered may And And I and there's projects you on would of improvement a broadly, appreciate one, DTA capital to, what could is need you. what perspective more sort terminal speak just how kind necessary? may mentioned cost well, that be of maybe your -- improvement be your projects. to necessary strategic then if that. at two, long-range I capital for peer of your

John Drexler

I'll here. out Lucas, So start

Just It us sufficient asset an assets DTA DTA, that Right but like for million needs for an needs. million that as now, excess tons capacity. about ownership all has That it leaves that to using is tons. have for we evaluation. is strategic reminder, in asset X our of capital a a have meet interest us capacity probably to XX% us, we're a than asset. more -- with X of

market our make We of are to we'll excess a that with capacity given for the to may working with with unique throughput, is where we kind required through DTA economic, committing got goes we've a we're there. those sure that lot necessary, capital see we're capacity capital that evaluate the we that capital.Where as recover of we the needs, where opportunity forward throughput go additional can be

So asset a DTA has us. It continues been a great asset. to be great for

in We expect we we that I we needs that lot capital it of as manage feel good a And ways forward. we forward. will different move can the as think go of move

Paul Lang

we as the over about And to We've The may they're offset not and surprise. John great we've them a we given with guidance, other that, think out capacity little of clearly said them as on degree it look, also as relationship less capital as projects a baked our with a CapEx years. we partner to a party. to have pressure thing add our than are ability it's us large what our numbers is have And third about going I'd excess talked we've far these in throughput. a talking that [indiscernible] the

well think an to a to I and and really issue but look, all it's So us not it's good, us. surprise not really

Matthew Giljum

for with requirement look, really with that as to be associated flows spare relatively annual as to third-party we very expect additional As throughput modest. view we generate cash And the it, us, manageable. look John it at indicated, capacity

going asset. good going to to logistics an manageable. think be it's a overall to again, but invest want our important of continue We it's highly So forward, chain We in it. part

Lucas Pipes

leased or idle at moment? excess third to currently is is capacity And your there the it just a party

Paul Lang

spare offered of We some out -- We've capacity. some Yes. just that capacity. recently

is can that husbanding those We started process likely step the rather To side, of and really fit been just meaningfully, us, for thermal been on will there's have sort on a the to last point, We we'd this that but which volumes front demand but so. first have for thermal. focused expand it continue few as on for throughput. it and years, good have thermal on move taken the that do really

Lucas Pipes

of you a to wouldn't But coking about outlook. on going on then wondered output for curve helpful. for the bell could think If mine here expect mines, too a volume Again, you coal maybe normal for X if shape one That's a typically your back And but curve provide call. I on of kind And deviation that I think the your bell or so, just way helpful. outcomes is portfolio, to I what some shape coal distribution standard your you coking to range need that could mine, speak to would be look the ranges I be like? coking and scientific, really does provide coal no

Matthew Giljum

powerhouse right? High-Vol one expect deviation broad in the you would Yes. I periods operations, as Lucas, mean, not production, into we we've Leer less. I tons, X where view, South. think got longwall have scale, kind general them, little a I You of one of But is A mine a million Between just X I here. think certain opportunity in and Leer from discussion mean, X of the may standard may get

they're a our a mine million X ton around little more. indicated operations, periods miner as to with year other of Laurel, is You another then we've that may Mountain each and Beckley kind And have pace. be where built continuous X

had XX look there. would have the in have million that gets kind tons projects, quite will how of simplistic of through kind you, right in to kind always that's of volumes success bringing what it volumes the kinds frankly, of and optimize view, you view efficiency the additional all but We out across most the portfolio around I

Deck Slone

ton next We're coking And per again, in yet. we're the in coal It guiding range Lucas, process. going about not think next year X has thick year. budget in year, as we through for is million that Leer very been there coal.

we have again, think is as about in what range, range. potentially going of ton is is So Leer X.X we guidance And and indicating we'll Beckley expect Laurel we very upside million take at And the consideration kind in. that feel both into there. that X we're more guidance we been forward confident which and that South million there in provide XXXX, sort of Mountain as

but we a and to So X want color. little million there's as and promise that of deliver certainly next conservative we're forward. to we make careful and be for over sure numbers But gives that you idea that year, to upside very tons guiding maybe under go

Lucas Pipes

XXXX. North or quality American of the Mount would overweight how The And domestic you High-Vol Was I one Laurel contracts describe medical that? then that for coal, appreciate or side, was that. on that that A? directly mostly

John Drexler

that were American majority our had the products, Yes, the products we we suite with A, High X.X that exposed Vol for I pleased majority achieved. the with weighted that real B. into with where look, have Lucas, pleased we volumes. excited got markets the is tons the the as we're Paul say, indicated. markets. modeling split High-Vol we we Equally North amongst High-Vol the of or and does 'XX, as use the the really would opportunity Low-Vol, we yes, that that, should the the vast represent A say of yes, But and outcomes likely typical sold, purposes, that volume I various export we full you the million can have And to our we step Obviously, about

Lucas Pipes

me. Okay. Then last question for for now

M&A that they M&A are you some are do about describe out of side, attractive your companies you are would How you this sale, how On for traded that public valuations. -- assets looking very there in the level interest? environment? some there Are think

Paul Lang

time, same we can we're all way The Lucas, every comes particularly out that will I'll the that look which answer continue look at we But everything, that anything to at lower at we've value, currently and particularly answered it where it and ears. at. we've ourselves, time, anything probably greater up. costs the bring at anything looked we're

we'll also Our best focus our our us investment is I But against would the we'll our you, in own the And though, own should figure and -- out and would is question purchasing always that and our we'll is. right I ourselves and hold expect it, now what everything, own look what that's try move. against to at assure to is option it's shareholders I stock, right will expect and if stock.

Operator

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

Paul Lang

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

in reward remain focused coal on progress in earlier, XX% I delivering the that XXXX making operational versus just As expect step-up with significant portfolio metallurgical XXXX. our continue in in importantly, process we In yet XXXX optimistic excellence. we forward noted that, shareholders volumes XXXX.I healthy, nearly safe as through we and potential substantial program.With Stay Arch's and increase everyone. as to the we'll group sharply an February. well We're to in our to of way we in look momentum company's think anticipated to and another with conclude operator, long-term the in change a the short, call, as about and a remain outlook coking reporting return expect capital

Operator

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

now may disconnect. You

Arch Resources (ARCH) 26 Oct 232023 Q3 Earnings call transcript