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Peabody: costs per ton in Powder River Basin increased from third to fourth quarter 2022

Peabody also announced it's retired all senior secured debt and that it had record free cash flow in the fourth quarter.

A haul truck's tire is chocked by a coal miner at North Antelope Rochelle Mine (NARM). (NARM Safety/ Peabody Energy)

GILLETTE, Wyo. — Peabody’s Powder River Basin costs per ton increased 13% from the third to the fourth quarter of 2022, the company announced today in its fourth quarter and overall 2022 report.

The company said the main factors that increased the price were lower sales volumes, higher black lung excise taxes as part of the Inflation Reduction Act, and higher maintenance and repair costs.

The segment shipped 21.2 million tons at about $13.88 per ton in the fourth quarter. The price increased by 89 cents per ton over the third quarter. It sold about 1.1 million tons less, largely because of weather-related rail disruptions.

The segment reported 8% adjusted EBITDA margins and adjusted EBITDA of $24.7 million in the fourth quarter.

Across each of its segments, the company reported record earnings and that it’s retired all senior secured debt.

In the fourth quarter of 2022, the company’s net income for common stockholders was $632 million, up from $513 million in the fourth quarter of 2021. That’s a 1-cent increase per diluted share. The company’s fourth-quarter 2022 results included a $199.3 million unrealized mark-to-market gain through coal hedging and adjusted EBITDA of $500.5 million, up from $444.4 million in the fourth quarter of 2021.

Overall, the company made $4.98 billion in revenue in 2022, up from $3.31 billion in 2021. Net income attributable to common stockholders was $1.30 billion, or $8.31 per diluted share, up from $360.1 million or $3.22 per diluted share in the prior year. Adjusted EBITDA was $1.85 billion, more than double that of 2021 ($916.7 million). Peabody generated cash flows from $1.17 billion in operations, which led to free cash flow of $1.15 billion, up from $420 million in operations and $288.5 million in free cash flow in the prior year.

“Our remarkable fourth quarter results demonstrated the value of Peabody’s diverse asset portfolio,” Peabody President and CEO Jim Grech said. “While there were challenges to overcome, we were able to deliver record Free Cash Flow and repay all remaining senior secured debt. Additionally, due to our strong operating results and financial condition, we are actively addressing the remaining requirements to implement a shareholder return program.”

Peabody’s highlights

  • Retired all senior secured debt
  • Record Free Cash Flow of $580 million in the fourth quarter
  • Adjusted EBITDA of $501 million in the fourth quarter and $1,845 million for the full year 2022
  • Record full year net income attributable to common stockholders of $1,297 million and Diluted EPS of $8.31
  • Achieved highest 2022 quarterly production rate in three out of four operating segments in the fourth quarter
  • Record low annual global injury rate, with zero reportable incidents at three of our mines
  • Commenced redevelopment of North Goonyella, a premium hard-coking coal longwall operation in Australia with over 70 million tons of reserves
  • Completed Moorvale South project, which adds incremental volumes and extends the mine life at the CMJV
  • Extended life of El Segundo/Lee Ranch through a new long-term coal supply agreement
Powder River Basin
Quarter EndedYear Ended
Dec.Sept.Dec.Dec.Dec.
20222022202120222021
Tons sold (in millions)21.222.322.582.688.4
Revenue per Ton$             13.88$             12.99$             10.99$             12.89$             10.99
Costs per Ton12.7111.2910.0012.069.46
Adjusted EBITDA Margin per Ton$               1.17$               1.70$               0.99$               0.83$               1.53
Adjusted EBITDA (in millions)$               24.7$               37.9$               22.3$               68.2$             134.9

See the full report here.

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