BTU - Earnings call transcript Q2 2024 | Peabody Energy Corporation

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Operator

Good day, and welcome to the Peabody Second Quarter 2024 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Karla Kimrey, VP Investor Relations. Please go ahead.

Karla Kimrey

Good morning, and thank you for joining Peabody's call for the second quarter of 2024. President Chief Jim Marketing are Spurbeck; CFO, today our and Officer, me and Grech; CEO, Mark With Malcolm Roberts.

release, well of with our earnings forward-looking the risk encourage the you filings there, our consider find Within along referenced statement you information to as financial with as non-GAAP reconciliation public factors a measures. We will on the SEC.

call over to the Jim. turn I'll Now

Jim Grech

in the Peabody. and forecasted, morning, confident am came for everyone. time taking to half second good for and results join for XXXX. Karla, outlook report Thanks, your and to you interest I pleased quarter a the today us Thank the of we second have as in

X date, a had safety, at More have returns year Centurion. approach is importantly, X metallurgical reportable having is in injuries. shareholder maximizing growth Peabody balanced to and through to a our investing value of organic increasing Peabody of shareholder mines value remarkable as committed with our #X coal

Our market conditions. us resilient prevailing in to and dynamic balance be the flexible sheet allows

As share hard project with going additional return expectations. million outlook very opportunistic The and favorable development committed our Centurion, of our the growth we $XXX accordance a remainder and policy for an the underground initial rates for shareholder coking year, result, coal world-class repurchases. in have exceeding well. is are

coal and in June, our miner. first July, in continuous We development are our to able commissioned second mine we

ship and first longwall coal the fourth to to coal this for budget and of in on target quarter expect XXXX. quarter are on We the from customers are mine in

average to production tons. the mine potential opportunity for Well Peabody's Wards years of the approximately to Seaborne the returns of is we coking financial highlighting life with is re-weight This blends of established coal quality extended and XX million Met. acquisition an cornerstone coal have recent the sustainable With unique X.X to a over annual of earnings an deposit,

results operating safely. came quarter our Thermal expectations. our segments. in as Overall, Seaborne to and operational mines performed second forecasted to The on moving Now performed Segment

with utilization. to availability continued Mine truck equipment improved operate and Wilpinjong Our well

thermal XXXX. demand Wilpinjong address, As of volume we the Asian also for came Seaborne remainder such, as segment product. Malcolm expectations met have forecasted. the continues for will The growth increased to And our in market as see

Our the significant as volumes, quarter prices in costs and were were Australia out expected. CMJV experience realized shipments of some week last did the of and delayed. some the rain

challenging schedule was full The geotechnical Additionally, our through in is of reduced guidance. conditions, reflected CMJV opened year ahead mid-May. will Alabama in Lock be in mining which Demopolis

were September the Corps earlier the of to the While lack a is the with fix June fix Army XX. as another we October pleased U.S. install of intermittently hold the lock a can traffic is unfortunately, temporary online expected, be bulkhead to to -- unstable by end on determined bringing open planning Demopolis The early pass core lock was Engineers permanent until achieved. allow which than to a to Lock

Creek Lock and year As we reduced reflected utilize transportation full Shoal slightly was rail to while continue we guidance. down, alternative did volumes at Demopolis the in will the

I of slightly on want came performance resulting improved were other higher shipments in than cash continued a as margins. to strong the In logistics efficiency, segment thank emphasis PRB our we partnership and The providers had with out for shoulder support. rail operational expectations their season. and the continued

along inventories stronger remain year, guidance half high, as it While of with full customer we gas we prudent second a prices. felt natural depressed reduce to expect was year the

as we than against Other the saw total, as quarter. and thermal originated increase expected were we moved U.S. In the U.S. with down. thermal for Shipments and delivering XX% costs began volumes first during quarter revenues in expectations. line contracts markets, less new were the nominations up and slightly

We today. will markets Officer, on be in to our the delivering this Malcolm continue outlook Marketing also. Malcolm? Chief July our Roberts, see

Malcolm Roberts

Russian Seaborne Newcastle Jim. on thermal rates with thermal spot some metric described Russia, States coal range thermal ton trade demand balanced. to imposed the during The bias purchases. further the quarter. as averaged continue second in price reducing met the high-energy and to Improved Newcastle economic production is Thanks, United Australia, was for per of resulting coal market high-energy best quarter. higher the coal Newcastle In $XXX sanctions

continuing have grown and imports, increases Vietnam show thermal imports have seaborne in China Both coal respectively. year-to-date increases China in XX%, in Asian demand year of Vietnam. this thermal supporting with demand recorded electricity growth to strong coal XX% imports and coupled with strong approximately

metallurgical the $XXX margins prices metallurgical per market, the metric demand steel quarter during during premium quarter and seaborne profit averaged coking coal. market of Parts coal reported the Within subduing thin ton. tepid coal demand global for hard growth the

because hard In production find hard in port was India, of the China. season and in dragging maintenance quarters. partially offset the Queensland from market on Coking during support supply economic June targeted weak a at steel coking production production restricted supply stimulus constrain periodic coal exports low was side China of while future coal steel disrupted with quarter incident expected and Baltimore disruptions, in in coking The mixed Queensland USA estate premium in is sector. prices election major to by coal due the the curtailing monsoon to including exports historically activities historically real demand, onset rail and mine

supply supported to constraints, buyers supply sufficient In by improved side second meet the and switching these quarter Russian. proved quarter. Despite relativity the demand some finish the prices supply $XXX metric ton, the of during place PCI PCI per during segment, to price constrained coal The supply coking during to a of the spot to coking XX% hard XX% at coal. quarter increased Australian quarter, premium in

overall the months coal XX, has and generation slightly States, market Overall, to of China, June balanced In United by and from remains influenced the in its coal the forecasted the This inventories July in year-over-year, is thermal volatility to elsewhere. year, rate X despite generation. by Australia year-end. an increased exports the increase this energy exposed leading in performance to of in a The outlook electricity electricity by in increase EIA use coal the prices natural metallurgical reduction driven XX% gas fairly update during and from electricity renewable demand. economic low India ended generate to stronger short-term

Mark I'll now to the to over turn it details. financial cover

Mark Spurbeck

second stockholders we diluted everyone. EBITDA Thanks, $XXX.X Malcolm, share common net income to $XXX.X per good adjusted and attributable morning, the quarter, or of million $X.XX million. and In recorded of

EBITDA settlement reached development the $XXX.X was for an the settlement previously the We million in included $XX.X million as while of remaining property was that we adjusted During and million. $X.X recovery recorded insurance off. of quarter, the written underground

interruption million the at which Shoal business last At $X.X had received we year. will cash were remaining Wards $XXX losses million This settlement on and all covers and a Creek advance payment in June both $XXX.X quarter. noted acquiring We quarter property this receive suffered last the XX, and Well call. million million our tax $XXX of making after income payments, second of

for quarter, shareholder cash repurchase we since didn't dividend and program, restarting the return paid quarter During first shares. a we per the $X.XXX share the

quarter the in share a per buybacks. second available sixth $X.XXX forecast second a in additional in with today, declared quarter for the of free share $XXX we However, And the the year, operational for a row, an cash and half recovery strong a favorable dividend. announced flow million

Newcastle more to complex, the now segment's $XX million quarter The EBITDA Thermal quality resulting production. tons. realized in the second than improved prices XX% better adjusted Seaborne additional Turning costs quarter export previous segment than increase EBITDA, was $XXX margin in offset higher from of quarter a than on the the as in mix higher million recorded of Wambo Wambo much results. adjusted better from prior production

million compared of in production, an Seaborne million to Each in comparison. noted to including mine million segment at the $XX Creek the million or insurance Met And of adjusted XX% settlement, as segment apples-to-apples quarter. earlier, cash to The over third generated Shoal increased the first a shipments expect quarter-over-quarter. $XXX collect quarter's quarter $XXX we related second EBITDA, result $XX increase in

the volume thermal million season. The mines of PRB $XX.X second produced quarter XX.X traditional $XX U.S. below tons the adjusted million expected to EBITDA. first segment reported The shoulder is The shipped quarter's of million due outstanding tons unit as XX% is from quarter first costs, to quite average significantly ton. flat managing did EBITDA kept lower which job levels margin per approximately adjusted $X.XX mines increased an costs and

stronger The the are in tons other million adjusted both fourth and expecting U.S. in segment the we shipments $XX EBITDA. thermal third XXX,XXX generated even first increased quarters. Shipments quarter from and

platform cash and margins positive to thermal U.S. Our demonstrate flows. strong continues free

and tons in ton million adjusted a XX.X quarter. margin combined tons first thermal second of per quarter shipping million after ton basis, realized shipped operations $X.XX the and margin EBITDA EBITDA adjusted an per XX.X On the in $X.XX U.S. of the an

million the EBITDA adjusted year, only half thermal our of while the $XXX U.S. of requiring first $XX.X capital. For of million have mines produced

first second the free the books, couple in despite we in With the cash half robust flow challenges. expect of half a

by for as ash at As and continues Seaborne thermal XXX,XXX adjusted are increased customer for net the prices increase The low. X was conditions challenging combined demand guidance segment for Shoal outages as CMJV tons to products. support full natural due Jim price volume successive Wilpinjong the locked full remained particularly inventories Seaborne year expectations, to X stubbornly XXX,XXX items. and have Creek. on high noted, We higher million year outperform the costs Warrior the volumes PRB per remained we tons volume and to with $X ton. reduced tons lowered by strong geological impact of Black the the River impacts at volume expected X gas

as Peabody's on We price not in all manage million have volumes And XX the done customer of while will deferrals previously, we contracts. maintaining have we any negotiated value tons.

the consistent to are first X export are product at priced expected million Taking we million to on ash X ton. are at tons. tons third Costs Newcastle million remain including tons products be while high XXX,XXX to at tons of quarter expect $XX thermal a another are unpriced. X. stable seaborne and $XXX.XX with look per X.X very average XXX,XXX $XX anticipated Shipments tons, quarter, the of

at in Seaborne to Metropolitan shipments longwall by tons relative we ahead first the planned realize QX achieve premium rebalance after XX% expected XXX,XXX to prices move be the shipment expect due X.X are midpoint After PCI price. a in ran to at recent production of of quarters. the coking Creek, the and the second at tons quarter. coal Met we is to of and and recovery benchmark better shipments second see XX% Shoal tonnage levels prices, to the production hard also Lower million should from and

first expected ton. the midpoint between second be quarters $XXX Costs and between and and per are to than land slightly the better $XXX

the per lower in increase Other flat experienced at traditional U.S. part second million to quarter. to the we are PRB ton million tons latter $X,XXX to Following $XX shipments, forecasting season the and prior tons costs volume $XX $X,XXX per margin building of thermal on also costs expect nearly With fixed be to ton. anticipated expect at shipments higher third benefit we ton, quarter-over-quarter and of from at in are shoulder in to X expected $X.XX the ahead per per to X we and cost third quarter unit also $XX.X million the remain again momentum the increasing are quarter, to quarter. to

favorable loss hit we a year's achieving settlement first coal at quarter, reached the in In targets milestone by and a Creek. summary, for last Shoal Centurion key at development second all negotiated operating

million is for buybacks. The outlook third another And $XXX today, available quarter good. we announced share equally

I'd like Operator, to call over the for turn now questions.

Operator

comes [Operator with Instructions] first Lucas Riley. The from Pipes B. question

Lucas Pipes

question my Jim, the allocation capital first on is side. Mark,

returns, think capital free available of XX% You have for I a cash it's flow. formula

look, about And $XXX so environment, this. of the commit. price Is we just should back think to allocation with we buybacks? of you want on that saying, to million the really questions additional X this how One,

if maybe cash return little flow it. you So available to lower, the is have a cash

formula So technically necessary. understand because allocation the I you it was would want to make that statement. just be presumably to additional with not trying that

I the appreciate So context.

you coal capital capital in opportunities U.S. some focused allocation. in really with you heard about your just assets shareholders? of some picture more broadly? There And Australia. I've M&A opportunities think are to on returning then and How too. organic bigger for are met sale Or growth do market, the

me? hear you Can I. did Jim,

Jim Grech

Lucas, some I'd to turn then on first come and over it like question. and your we'll Mark, your question to comment second to

so. just we the cash to we and have So our do on say to the least we say first like when I'd on at question, XX%. comfortable feel note optionality go we And the above certainly that to that XX%, we have

doing shareholder we're buyback. on with what here the that so our and to commitment is value a the And focused share prime of example increasing be

the some -- that I the more think rest about detail So you of on year. but have

So Mark, comment I'll that. on let you

Mark Spurbeck

I capital, year-to-date knew sheet flow Listen, half we Lucas. We in cash opportunistic the and starting ensuring, cash probably market purchase presents continued $XX the million allows Well wouldn't million second in with free Wards quarter. be $XXX always the balance development, of think it's since generate on here the lot that when Jim year. opportunities. of But a of resilient the mentioned, to our as us in first

XXX-day a I coal prices. generally equities our moving crossed XX-day the think average as coal stock with ] average [ recently are traded moving and off

coming Centurion further really our attractive this march share see a reduce in we So opportunity as as an we steadily to point to closer count online. and time

designed flexible us sheet. the our even noted is be to opportunity we balance As an be opportunistic to program with call, give our and resilient last on

the of clear, year, half. be see depending out, half second prices as free the change the flow year. should in into free program. and no we the But flows to do to cash we to in remainder second far generate cash on next As shake the where And good continue

Jim Grech

go To Lucas. questions your I'm ahead, Any follow. first your on sorry, second

Lucas Pipes

Yes, that's -- yes, exactly.

what I you think know on I M&A the up to wanted follow side.

Jim Grech

Yes.

want So that and is stress right which balance company, the sheet doing and in on X forefront our dividend. continue we're our the there's very as financial to, that. has on time and that. areas is just to taken X focused us that, a at And creating for buyback or with long strength focus value to stability, shareholder I are the now. Lucas, get maintaining that our to a focus on that One going is We're maintaining share

We're just safe dividend million in we keeping very we've and our and the overwhelming investment done focused and focus. As Mark mine put also and continuing into a That investment quarters another that the organic operations, said, growth have our the $XXX just also X in predictable. row, buybacks. we've the is in on the share Centurion reliable with

our every Assets value. everything come and desk. shareholder and the that's out market #X like on there the But focus company across that's our And focus that's coal comes on go is where is, with and where at. maximizing we're

now, up takes much a Certainly, at points look But I said that think the on. by. come I company them. very right focused Assets every on we're

Lucas Pipes

side. to helpful. for turn second of appreciate my I outlook to on Very I kind want operational question that. the the met coal

First, aware What the you And become at CMJV, the long geological could is could issues did how anticipated this those issues? -- think you those last exactly first split do of that issue? efforts? when volumes the hold associated on into costs then And impact you maybe your the and any mitigation if on the efforts, elaborate lock, XXXX? to XXXX then could might anticipated mitigation be with

Or out that, to? would of your clarification perspective, accounting guidance? cost just that your a guide would in coal if be actually So from there it you a numbers it. costs realizations then additional on reflected appreciate And would met that are come

Jim Grech

Lucas. Yes,

as off, those they on maybe be were be here as as then first said, back the we shipments, So we outage, there not efficiently to issue, stability would up installed expecting of on resume. shipments the then end is as towards but lock the to expected well for that lock, The opened the September. without lock be would for the to bulkhead

between end don't and we'll the is of expense We the see the overall think that year. material now

the $XX incremental looking of the we're the that million a shipments through we year again, of And $X extent cost end even And would the down of alternate goes and ultimate we're be this But keep it. be of couple million if and an that's that transportation high at to On different -- going. may expense routes to the trans. further. bring try have to that's looking we again expense of at side,

lock the extent that be outage. the So of would

is there. defaulting in As coal standard far the as that Coppabella, occurs seams

And through than through working to than right year. we we're more It's end of the We is through that occur. had time. happened through here we section work have not and the we all We we had the that, again, and uncommon anticipated, what now the faulting more it, expect it to anticipated. get

the on nothing there's of that what's we're Coppabella. We've again, at a faulting. There's with got out little than ordinary through bit So anticipated, and going working always right now. more just

Lucas Pipes

helpful. That's

would Or coal On it that of go unit realizations? the the million costs with of $X met hold million lock, costs? to would of kind the come out $XX through potential

Mark Spurbeck

segment all Yes. Lucas, Mark. And included it's in That's costs. guidance... in our it's the included

Lucas Pipes

the all entire the of And appreciate continued luck. color. really team to I Excellent. best

Karla Kimrey

you, Thank can take next question. Lucas. the We

Operator

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

Katja Jancic

a more of decline? that for reduction, provide you Can on color How much little of the hold on bit how that staying Maybe tons a segment. is XXX,XXX much the met lock?

Jim Grech

that is going CMJV. the The majority of to with be

with maybe and about may is lock or so tons think is I with the that XXX XXX,XXX the the of other catch, tons hold about the XXX,XXX approximate be CMJV.

Katja Jancic

quarter, think second And ship X/X maybe in of half because then last I of will indication closure. Creek Shoal was the the Demopolis the that Lock

So X they can of a locks, between how have? is difference there much these impact

Jim Grech

again, as Shoal logistics tons into the impacts be the routes, all for of ultimate looking of We it's I do we've impact to transportation have about we in at the have Creek the to net after alternate said, factored them. we think guidance because year. been overall we reduction and XXX,XXX for that's it's the But tonnages both going the

Katja Jancic

year? next can Okay. expect how ship us much going about And should you into And XQ? then to the in how we tons development you remind on Centurion, shipments the think

Mark Spurbeck

XXX,XXX. be end Last probably the Look, saying by alone. of now, to XX,XXX XX,XXX said the we'd time, year. we Yes. I around Right think

Katja Jancic

year? And for next

Mark Spurbeck

tons. XXX,XXX call I'd around

Operator

Benchmark question from Martin next the comes Nathan with Company. The

Nathan Martin

guys. quarter second just sticking anticipated start with for any Maybe regulatory there longwall a up remaining or you results, to before get the Centurion us, quarter first Could of you second. permit the just remind on 'XX. the Congrats are hurdles in

Jim Grech

No, Nate.

have We and all passed. hurdles regulation permits regulatory the

in mining. month that comments, in actually is anticipated right June, were we're the the of said getting what on footage Xx amount expected we And you're focused the stay degassing to really on So went need month and the about of if of as Those up of than we get -- we're of doing really at had the the development. and better development plant us we now ahead now ahead permitting focused that developed section June, focused that we the prep and in are the us we on to are running right longwall to those or regulatory. thing mining, not the looking issues

Nathan Martin

million you And spend, far Okay. to guys the Got the the release, be correct? half? about spent spent second that 'XX how the how much that year-to-date I And the $XX expected much it. and of you think million. remaining million then I this for spent you in think 'XX you versus I saying just $XXX about $XXX caught Secondly, thus related that in mentioned point. $XXX Mark, million would then at leave would of

Mark Spurbeck

that's second million of to us Nate. There's would $XXX June up about probably We for about half the got the XXXX. year. million Yes, on more million about of project. $XXX the the the for would $XX the XXXX $XXX $XX That XX. from have budget remainder million. million million, million $XX through probably right, Still $XX in of in We start be about and bring

Nathan Martin

well tie question it as we XX% XX% and Okay. then now versus of maybe price piece, mentioned, into it too. know Lucas about my met But I know that to previously. bit guess, the I over little guys asked roughly maybe benchmark And CMJV. other this. I'll to a you to think [indiscernible] -- to you, XX% is XX% this Perfect. expect Mark, I achieve was I

of it likely market. I coal the heard some anything driven there? of there reduced? to the CMJV, that kind going of prices are part the any else thoughts qualities is think mining helping curious be was great with that I you are to that in get But Russian I your coming would coal be increase mix Is to what increase that's driving there. now overall? that PCI PCI out Just by of right

Jim Grech

within is say I'll and about our mix XX% that incorporated sales Look, year our pretty constant, has no it. PCI guidance full

Mark Spurbeck

Yes.

So that the is benchmark. recovery most increase PCI of to that most of the -- price relative

in is with increase there as a mix coming to of the think out slight improve mix well. the in Moorvale I semi-hard

Operator

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

Lucas Pipes

Centurion tons. In the question. the year of million Centurion volumes kind opportunity as February by XX-year X.X, you after, Follow-up release at XX X.X, break described I XXXX, out you X.X, presentation this morning, And where year X.X remember X.X, a X.X.

Is to words right, mine million market the a you were update morning. comprehensive that is reflecting update. obviously the I X.X So the X.X cited And plan below million more remember if maybe this on planning well. you

else. just if wondering process and we should if that completed, anything So been has expect

Mark Spurbeck

Lucas changed the to One, the more production XX-year value X showed the brings X.X has originally life of changed. years. property million X.X first -- over The area Goonyella presentation the the tons project. into tons as or between million area basis. we're a things. Those million the South annual well. It North get only panels, just an in few Wards more GM that not guidance, But this years nothing's the on those tons, couple those Well you're for acquired. tons to to X right, Wards that going Longer the first demonstrates we account moves, again, longwall Well takes

a to update an half on costs project presentation basis. the a on volumes, maybe as study, a full do plan a still to update, that and market those here and the second again, doing stand-alone the far As integrating year and together. out come are plan we maximizing overall of give that in figuring We

Operator

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

Jim Grech

employees awards. our Antelope I the Mine our for they've for Kayenta both the first also Rochelle XXXX. to call for joining support. mine, they efforts, at North achieve reclamation our outstanding their to customers unit for their to thank safety those work thank want and at continued their on half that like Operator, recognized reclamation our our thank for were concludes Also the and our and investors, I'd outstanding on call. everyone and to I'd to I'd thank of today, our mines in really especially focus done the like employees vendors those like

Operator

This concludes you call. presentation. the conference Thank today's for attending

You disconnect. may now

Peabody Energy (BTU) 1 Aug 242024 Q2 Earnings call transcript