Peabody PRB production, revenues up in 2Q2021

A haul truck is loaded in the pit at Peabody Energy's North Antelope Rochelle Mine (NARM) (Photo Credit: Peabody Energy)

Powder River Basin (PRB) coal sales generated more than a third of Peabody Energy’s total revenue during the second quarter of 2021 (2Q2021), the company announced Thursday.

Peabody Energy ended the first half of 2021 with quarterly earnings in excess of $723 million. Of those earnings, approximately $248.6 million, or 34 percent, came from selling 22.5 million tons of PRB coal at $11.06 per ton, according to the company’s second quarterly earnings report for 2021.

Total revenues this past quarter are nearly $97 million higher over the same period last year, primarily due to the impact of higher production volumes and improved seaborn thermal pricing, per the report.

The 22.5 million tons of PRB coal sold this past quarter is around 4.6 million tons, or 26 percent, more than the amount sold this time last year, per the report, totaling 51 million total tons of PRB coal sold in the first half of 2021.

After production costs, PRB mining operations generated $45.5 million this past quarter for $75.6 million total so far this year. Company-wide, Peabody Energy ended 2Q2021 with $561.9 million in cash, a reduction of nearly $62 million over the previous quarter.

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Peabody President and CEO Jim Grech said company leadership is optimistic about the future given strong coal market demand and pricing around the globe in the aftermath of the COVID-19 pandemic.

“Our assets are responding to the current market cycle and continue to benefit from cost improvement initiatives,” Grech said in a statement.

Looking forward, Peabody Energy anticipates the cost per ton of PRB coal average to come in slightly higher than the $9.04 seen this past quarter to $9.35, an increase of more than 3 percent that could decrease revenues seen from the PRB in 2Q2021 by more than 15 percent, according to the report.

Regardless of what the future brings, Peabody has taken a disciplined approach focusing on expanding margins through ongoing operational improvements, cost controls, sales strategies, and reducing debt as leadership progress to position the company to be resilient in all market cycles, Grech said.

Coal deliveries moving into the second half of 2021 will remain largely dependent on general economic conditions, weather, natural gas prices, utility inventory levels, and rail performance per the report.