GILLETTE, Wyo. — Peabody recently announced it sold more and brought in more revenue from the Powder River Basin in the first quarter of 2023 compared with the first quarter of 2022.
In terms of adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, Peabody made about 20% more in the first quarter of 2023 than it did in the first quarter of 2022, the company announced in April.
Its adjusted EBITDA was lower in the Powder River Basin compared with the overall company’s, but it was higher than that of the fourth quarter of 2022 and the first quarter of 2022.
In the second quarter, Powder River Basin volume is expected to be about 21 million tons, at an average price of $13.70 per ton and cost of about $12.30 per ton. Other U.S. thermal volumes are expected to be about 4 million tons at an average price of $52.50 per ton and cost of about $41 per ton.
The company’s adjusted EBITDA was $391 million in the first quarter of 2023, up from $328 million in the first quarter of 2022. Peabody’s net income attributable to common stockholders was $269 million for the first quarter of 2023, compared to a net loss attributable to common stockholders of $120 million in the first quarter of 2022. Operating cash flow was $386 million in the first quarter of 2023.
“In the first quarter of 2023, we safely delivered on our commitments and produced another strong quarter of financial results with Adjusted EBITDA of $391 million, up nearly 20 percent from the first quarter of 2022,” Peabody President and Chief Executive Officer Jim Grech said. “After retiring $1.5 billion in secured debt, we have now delivered on our commitments to pre-fund reclamation costs and initiate a plan to return value to shareholders through share repurchases and dividends.”
| Powder River Basin | |||||
| Quarter Ended | |||||
| Mar. | Dec. | Mar. | |||
| 2023 | 2022 | 2022 | |||
| Tons sold (in millions) | 22.0 | 21.2 | 20.6 | ||
| Revenue per Ton | $ 13.89 | $ 13.88 | $ 12.18 | ||
| Costs per Ton | 12.26 | 12.71 | 11.81 | ||
| Adjusted EBITDA Margin per Ton | $ 1.63 | $ 1.17 | $ 0.37 | ||
| Adjusted EBITDA (in millions) | $ 35.8 | $ 24.7 | $ 7.6 |
The Powder River Basin shipped 22 million tons at an average sale price of $13.89 per ton in the first quarter. That price was 14% more than the first quarter of 2022. It sold about 0.8 million tons more than it did in the fourth quarter. Customer nominations and rail performance were higher.
The first quarter’s cost per ton, $12.26, was higher than the company expected, with the challenges of timing of equipment repair and maintenance costs. The segment reported 12% adjusted EBITDA margins and adjusted EBITDA of $36 million.
Other U.S. Thermal Quarter Ended Mar. Dec. Mar. 2023 2022 2022 Tons sold (in millions) 4.5 5.0 4.2 Revenue per Ton $ 54.73 $ 52.35 $ 48.46 Costs per Ton 40.65 40.84 36.54 Adjusted EBITDA Margin per Ton $ 14.08 $ 11.51 $ 11.92 Adjusted EBITDA (in millions) $ 64.2 $ 57.8 $ 50.0
During the first quarter, the other U.S. thermal segment shipped roughly 5 million tons at an average realized price of $54.73 per ton, or 5% more than the prior quarter. The cost per ton, $40.65, was close to that of the prior quarter. The segment had 26% adjusted EBITDA margins and adjusted EBITDA of $64.2 million.
The company said its past quarter highlights included its announcement of a $1 billion share repurchase authorization and the launch of a shareholder return program. It beat its expectations of seaborne thermal export volumes by 17%, safely completed a longwall move at Wambo and completed pre-funding of long-term mine closure and reclamation obligations. It also eliminated the bank letter of credit facility, increasing financial flexibility and reducing fixed charges.
Peabody’s Shoal Creek Mine in Alabama experienced a fire March 29 involving void fill material utilized to stabilize the mine’s roof structure, the release said. All mine personnel were safely evacuated from the mine. The Mine Safety and Health Administration on April 26 approved a temporary sealing program for the affected underground area.
Peabody ended the quarter with about $890 million of cash and $937 million of restricted cash and collateral, including $760 million for reclamation obligations and $177 million for port and rail commitments and other performance guarantees. Cash margin required for the company’s coal hedging activities dropped to $60 million at the end of the quarter.
In April, Peabody announced an amended agreement with the providers of its $1.3 billion surety program to establish a collateral limit through 2026 and remove restrictions on shareholder returns, with some liquidity requirements.
Shareholder Return Program
Quarter Ended Mar. 2023 Cash Flow from Operations: $ 386.3 – Cash Flows used in Investing Activities (58.5) – Distributions to Noncontrolling Interest (22.8) +/- Changes to Restricted Cash and Collateral (1) (43.1) – Anticipated Expenditures or Other Requirements — Available Free Cash Flow (AFCF) 261.9 Allocation for shareholder returns 65 % Total shareholder returns 170.2 – Declared dividends (10.9) Total available for share repurchases $ 159.3 (1) This amount is equal to the total change in Restricted Cash and Collateral on the balance sheet,
excluding amounts already included in cash flow from operations and the $660 million one-time funding
related to the surety program amendment.
First-quarter shareholder returns will include a $0.075 per share regular dividend and repurchases of Peabody common stock. Peabody plans to move to a more balanced shareholder return program of fixed quarterly cash dividends, variable dividends and share repurchases in the second half of this year.
Seaborne thermal in the second quarter should be 4 million tons, including 2.6 million export tons. One million export tons are priced at $243 per ton, and about 1.2 million tons of high ash product and a half million tons of Newcastle product are unpriced. Costs are supposed to be about $50 per ton.
Seaborne metallurgical volumes are supposed to be 1.7 million tons. Half a million tons are priced at $244 per ton. The remaining unpriced volumes are expected to achieve roughly 75% of the premium hard coking coal price index. Costs are expected to be about $140 per ton.
