Peabody(BTU) - 2024 Q3 - Quarterly Results

Executive Summary & Highlights Overall Financial Performance Peabody reported $101.3 million net income attributable to common stockholders for Q3 2024, a decrease from prior year, with $224.8 million Adjusted EBITDA and strong operating cash flow Overall Financial Performance Summary | Metric | Q3 2024 (Millions) | Q3 2023 (Millions) | | :-------------------------------- | :------------------- | :------------------- | | Net Income Attributable to Common Stockholders | $101.3 | $119.9 | | Diluted EPS | $0.74 | $0.82 | | Adjusted EBITDA | $224.8 | N/A | | Operating Cash Flow | $359.9 | N/A | Key Operational Highlights Peabody achieved significant operational milestones in Q3 2024, including project acceleration, strong production, and shareholder returns - Centurion development rates exceeded expectations, developing 2,700 meters in Q3 compared to a plan of 1,200 meters. First development coal was washed in September, with the first customer shipment scheduled for Q4[2] - Powder River Basin (PRB) volumes were 22.1 million tons, surpassing expectations[2] - Seaborne Thermal production increased, adding approximately 300 thousand tons to saleable coal inventory[2] - Completed $100 million of share repurchases during the quarter[2] - Declared a common stock dividend of $0.075 per share[2] Third Quarter Segment Performance Seaborne Thermal The Seaborne Thermal segment reported strong performance with $120.0 million Adjusted EBITDA, driven by better-than-anticipated production and costs, with Adjusted EBITDA margin per ton increasing by 15% Seaborne Thermal Segment Performance | Metric | Sept. 2024 Quarter | Jun. 2024 Quarter | Sept. 2023 Quarter | | :-------------------------------- | :------------------- | :------------------ | :------------------- | | Tons sold (in millions) | 4.1 | 4.1 | 4.2 | | Revenue per Ton | $76.21 | $74.43 | $71.38 | | Costs per Ton | $47.01 | $49.14 | $43.68 | | Adjusted EBITDA Margin per Ton | $29.20 | $25.29 | $27.70 | | Adjusted EBITDA (in millions) | $120.0 | $104.4 | $115.5 | - Adjusted EBITDA margin per ton increased by 15 percent compared to the second quarter, driven by better than anticipated production and costs[3] - Higher production resulted in adding approximately 300 thousand tons to saleable coal inventory during the quarter[3] Seaborne Metallurgical The Seaborne Metallurgical segment reported $27.8 million Adjusted EBITDA, with shipments and costs in line with expectations, strategically withholding nearly 90 thousand tons for a stronger fourth quarter Seaborne Metallurgical Segment Performance | Metric | Sept. 2024 Quarter | Jun. 2024 Quarter | Sept. 2023 Quarter | | :-------------------------------- | :------------------- | :------------------ | :------------------- | | Tons sold (in millions) | 1.7 | 2.0 | 1.5 | | Revenue per Ton | $144.60 | $149.29 | $162.02 | | Costs per Ton | $128.04 | $117.47 | $110.38 | | Adjusted EBITDA Margin per Ton | $16.56 | $31.82 | $51.64 | | Adjusted EBITDA (in millions) | $27.8 | $143.6 | $78.6 | - Opportunistically withheld nearly 90 thousand tons of shipments at Shoal Creek to avoid higher alternate logistics costs and weak market conditions for spot sales[4] - The segment is positioned for a stronger fourth quarter[4] Powder River Basin (PRB) The Powder River Basin segment exceeded volume expectations at 22.1 million tons, with improved cost management leading to a more than doubling of Adjusted EBITDA margins per ton to $2.34 per ton Powder River Basin Segment Performance | Metric | Sept. 2024 Quarter | Jun. 2024 Quarter | Sept. 2023 Quarter | | :-------------------------------- | :------------------- | :------------------ | :------------------- | | Tons sold (in millions) | 22.1 | 15.8 | 22.7 | | Revenue per Ton | $13.84 | $14.02 | $13.79 | | Costs per Ton | $11.50 | $12.89 | $11.41 | | Adjusted EBITDA Margin per Ton | $2.34 | $1.13 | $2.38 | | Adjusted EBITDA (in millions) | $51.7 | $17.8 | $54.1 | - PRB volumes of 22.1 million tons were better than expected customer nominations[6] - Adjusted EBITDA margins increased to $2.34 per ton, more than double the second quarter, due to continued focus on cost management[6] Other U.S. Thermal The Other U.S. Thermal segment delivered 4.0 million tons at costs of $46.50 per ton, aligning with expectations, and reported $28.4 million Adjusted EBITDA Other U.S. Thermal Segment Performance | Metric | Sept. 2024 Quarter | Jun. 2024 Quarter | Sept. 2023 Quarter | | :-------------------------------- | :------------------- | :------------------ | :------------------- | | Tons sold (in millions) | 4.0 | 3.7 | 4.2 | | Revenue per Ton | $53.52 | $55.21 | $53.89 | | Costs per Ton | $46.50 | $45.53 | $42.28 | | Adjusted EBITDA Margin per Ton | $7.02 | $9.68 | $11.61 | | Adjusted EBITDA (in millions) | $28.4 | $35.4 | $49.1 | - Delivered 4.0 million tons at costs of $46.50 per ton, in-line with expectations[7] Strategic Developments Centurion Project Update Peabody provided a comprehensive update on the Centurion premium hard coking coal project, estimating a net present value of $1.6 billion and a 25% internal rate of return, with first customer shipment anticipated in Q4 2024 - Centurion project estimated net present value of $1.6 billion with a 25 percent internal rate of return[8] - Expected to produce 4.7 million tons annually at first quartile costs over a 25-plus year mine life[8] - First development coal produced in June, first coal washed in September, and first customer shipment scheduled for the fourth quarter[8] - Peabody has invested $250 million of the projected $489 million needed to reach longwall production in March 2026[8] Shareholder Returns Share Repurchase Program Peabody repurchased 4.5 million shares for $100 million in Q3 2024, bringing total repurchases for the year to $180.4 million, with $469.6 million remaining under the $1 billion program - Repurchased 4.5 million shares for $100 million in Q3 2024[11] - Total repurchases for the year are 7.7 million shares totaling $180.4 million[11] - Since 2023, $530.4 million has been repurchased, leaving $469.6 million under the $1 billion program[11] Dividends The company declared a dividend of $0.075 per share on October 31, 2024 - Declared a $0.075 per share dividend on October 31, 2024[11] Financial Outlook & Guidance Fourth Quarter 2024 Outlook Peabody provided specific volume, pricing, and cost expectations for its segments for Q4 2024, including an increase in full-year Seaborne Thermal volume guidance Seaborne Thermal Outlook - Q4 volume expected to be 4.1 million tons, including 2.5 million export tons[13] - 0.4 million export tons priced at approximately $120 per ton; 0.8 million tons of Newcastle product and 1.3 million tons of high ash product are unpriced[13] - Costs anticipated to be $48-$53 per ton[13] - Full year volume guidance increased by 200 thousand tons to 16-16.4 million tons