Peabody Provides Update on First Quarter 2024 Results
- None.
- Lower than expected shipments in U.S. thermal segments
- Unfavorable seaborne thermal coal mix affecting production
- Lower average realized prices in seaborne metallurgical coal segment
- Higher costs at CMJV due to unplanned outage and repairs
- Lower U.S. thermal volumes due to weather and gas prices
- Approximate $18 million non-cash remeasurement of AUD denominated monetary assets
Insights
Peabody's preliminary financial results for Q1 2024 indicate a mixed performance with revenue of $980 million and Adjusted EBITDA of $160 million. The disclosed sales volumes show alignment with expectations for seaborne segments but reveal underperformance in the U.S. thermal segments. This underperformance could be attributed to unseasonably warm weather and competitive natural gas prices, which typically reduce demand for thermal coal.
The company's report of lower than expected shipments and the impact of an unfavorable seaborne thermal coal mix due to production issues at Wambo may raise concerns about operational efficiency. However, Peabody's management has indicated that these production challenges are resolved, pointing to potential recovery in the following quarters. Investors should monitor the company's ability to adapt to these operational disruptions and maintain profitability amidst fluctuating coal prices and demand.
The $18 million non-cash remeasurement of AUD denominated monetary assets suggests currency volatility that could affect Peabody's financials, considering the international scope of its operations. This factor adds a layer of complexity to the company's risk profile that stakeholders should consider, especially in the context of global economic uncertainty.
The preliminary financial results, including the Adjusted EBITDA, provide a snapshot of Peabody's operational profitability, excluding non-cash and one-time items. An Adjusted EBITDA of $160 million in a challenging quarter indicates the company's ability to maintain a level of earnings despite headwinds. It is important for investors to assess the sustainability of these earnings, particularly in light of the reported operational challenges and the competitive pressures from natural gas.
Investors should also consider the implications of the lower average realized prices in the seaborne metallurgical coal segment. The divergence from historical price relativities between High Volatile A (HVA) and Pulverized Coal Injection (PCI) to Hard Coking Coal (HCC) could suggest market shifts or changes in product mix that may have longer-term implications for Peabody's revenue streams from metallurgical coal.
Higher costs at the CMJV from unplanned outages and the acceleration of maintenance, highlight the importance of operational resilience and the potential impact of unexpected expenses on profit margins. The forthcoming complete financial results and management discussion on May 2 will be pivotal for investors to gain a comprehensive view of the company's financial health and strategic direction.
Peabody's reference to Adjusted EBITDA underscores the necessity for investors to understand non-GAAP financial measures. While Adjusted EBITDA offers a view of operational performance by excluding certain expenses, it is not a standardized financial measure and comparisons with other companies may not be straightforward. Investors should review the reconciliation of these measures to GAAP figures when the complete financial results are released.
The non-cash remeasurement of AUD denominated monetary assets is indicative of the complexities associated with foreign currency exposure. Investors should be aware of the accounting principles governing such remeasurements and the potential impact on net income. Fluctuations in currency exchange rates can have significant effects on the financial statements of a multinational corporation like Peabody and understanding these effects is vital for a comprehensive assessment of the company's financial position.
It's also important to note that the information provided is intended to be reviewed in conjunction with the company's SEC filings, which will include more detailed disclosures and management's discussion and analysis of financial conditions and results of operations—key documents for stakeholders to evaluate the company's compliance with regulations and overall financial stability.
Sales volumes in the first quarter were largely in-line with expectations for our seaborne segments while the
First quarter results were impacted by the following factors: 1) unfavorable seaborne thermal coal mix as a result of lower production at Wambo due to an extended longwall ramp-up offset by additional production of lower quality coal at Wilpinjong; 2) lower average realized prices in the seaborne metallurgical coal segment due to HVA and PCI to HCC price relativities significantly below historical levels and mining of lower quality coal at the CMJV; 3) higher than anticipated costs at the CMJV from an unplanned dragline outage and the acceleration of planned coal prep plant repairs; 4) lower U.S. thermal volumes due to unseasonably warm weather and continued low natural gas prices; and 5) an approximate
"Our first quarter included some unforeseen production challenges that are now behind us," said Peabody President and Chief Executive Officer Jim Grech. "The CMJV dragline and Wambo longwall are again operating on plan and Shoal Creek continues to exceed production expectations as we begin the second quarter."
On Thursday, May 2, 2024, Peabody will announce results for the quarter ended March 31, 2024. An investor conference call with management is scheduled for 10 a.m. CT on May 2, 2024.
Instructions for the conference call participation and accessing a replay, as well as other investor data will be available at PeabodyEnergy.com prior to the call.
Participants may also access the call using the following phone numbers:
Canada Toll Free 1 866 669 9657
International Toll 1 412 317 0480
Peabody (NYSE: BTU) is a leading coal producer, providing essential products for the production of affordable, reliable energy and steel. Our commitment to sustainability underpins everything we do and shapes our strategy for the future. For further information, visit PeabodyEnergy.com.
Contact:
Karla Kimrey
314.342.7890
1 Adjusted EBITDA is a non-GAAP financial measure. Please refer to the tables and related notes in this press release for a reconciliation and definition of non-GAAP financial measures. | ||||||||
Reconciliation of Non-GAAP Financial Measures (Unaudited) | ||
For the Quarter Ended Mar. 31, 2024 | ||
(Dollars In Millions) | ||
Note: Management believes that non-GAAP performance measures are used by investors to measure our operating performance. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. | ||
Preliminary Estimate | ||
Quarter Ended Mar. 2024 | ||
Income from Continuing Operations, Net of Income Taxes | $ 45 | |
Depreciation, Depletion and Amortization | 80 | |
Asset Retirement Obligation Expenses | 13 | |
Provision for NARM Loss | 2 | |
Changes in Amortization of Basis Difference Related to Equity Affiliates | (1) | |
Interest Expense | 15 | |
Interest Income | (19) | |
Unrealized Losses on Foreign Currency Option Contracts | 6 | |
Take-or-Pay Contract-Based Intangible Recognition | (1) | |
Income Tax Provision | 20 | |
Adjusted EBITDA (1) | $ 160 | |
(1) | Adjusted EBITDA is defined as income from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses and depreciation, depletion and amortization. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing each of our segment's operating performance, as displayed in the reconciliation above. Adjusted EBITDA is used by management as the primary metric to measure each of our segment's operating performance and allocate resources. | |
This information is intended to be reviewed in conjunction with the company's filings with the SEC. | ||
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could" or "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events, or developments that Peabody expects will occur in the future are forward-looking statements. They may include estimates of sales and other operating performance targets, cost savings, capital expenditures, dividends, share repurchases, other expense items, actions relating to strategic initiatives, demand for the company's products, liquidity, capital structure, market share, industry volume, other financial items, descriptions of management's plans or objectives for future operations and descriptions of assumptions underlying any of the above. The declaration and payment of future quarterly dividends remains at the discretion of the Board of Directors and will depend on the Company's financial results, cash flow and cash requirements, future prospects, and other factors deemed relevant by the Board. All forward-looking statements speak only as of the date they are made and reflect Peabody's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, Peabody disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive and regulatory factors, many of which are beyond Peabody's control, that are described in Peabody's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2023 and other factors that Peabody may describe from time to time in other filings with the SEC. You may get such filings for free at Peabody's website at www.peabodyenergy.com. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
View original content to download multimedia:https://www.prnewswire.com/news-releases/peabody-provides-update-on-first-quarter-2024-results-302113700.html
SOURCE Peabody
FAQ
What are Peabody's (BTU) preliminary revenue and net income for Q1 2024?
What is the Adjusted EBITDA for Peabody (BTU) in Q1 2024?
What impacted the sales volumes of Peabody (BTU) in the first quarter of 2024?
Who is the President and CEO of Peabody (BTU)?
When will Peabody (BTU) release the actual financial results for Q1 2024?
