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Arch Resources 2023 revenue totals $774M; final quarter thermal shipments top 15M tons

(file photo)

GILLETTE, Wyo. — Despite lower demand from the Powder River Basin, Arch Resources reports its thermal segment shipped 15.5 million tons of coal during the final quarter of 2023.  

During the last quarter of 2023, Arch Resources reported a net income of $114.9 million, finishing the year with revenues of around $774 million, according to the company’s latest quarterly earnings report. 

Thermal coal shipments outpaced metallurgical by several million tons at the end of 2023, though the revenue generated by Arch Resources’ metallurgical segment accounted for the lion’s share of the quarterly total with thermal raking in an adjusted EBITDA of $26.7 million, per the report. 

According to Arch Resources, thermal margins were supported by a much-improved performance from West Elk, which acted to counterbalance lower shipment levels stemming from a weakening demand environment in the Powder River Basin.  

Since the fourth quarter of 2016, Arch Resources’ thermal segment has generated a total of $1.4 billion in adjusted EBITDA while expending $172 million in capital, per the report. 

Coking coal remains Arch Resources’ primary product despite lackluster steel market dynamics with High-Vol A coking coal currently being assessed at $262 per metric ton on the U.S. East Coast. This pricing translates into strong margins for the company’s metallurgical segment, the report says. 

Premium Low-Vol coal from Australia is showcasing higher prices at $315 per metric ton, which Arch Resources feels creates an arbitrage opportunity for select U.S. volumes moving into the Asian Market, with the company securing six new Asian steelmaking customers during 2023. 

Arch Resources anticipates stepping up its coking coal production moving into 2024 and another solid contribution from its thermal assets supported by the return to normalized production levels at West Elk. 

“In short, we expect to again generate substantial discretionary cash flow to fuel our robust capital return program, while driving forward with our consistent and proven plan for long-term value creation for our employees, customers, and stockholders,” said Paul A. Lang, Arch Resources CEO and president.

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