Peabody Energy (BTU) Q1 2025 Earnings Call May 06, 2025 11:00 AM ET Company Participants Vic Svec - SVP, Global Investor and Corporate RelationsJames Grech - President & CEOMalcolm Roberts - Chief Marketing OfficerMark Spurbeck - EVP & CFO Conference Call Participants Nick Giles - Senior Research AnalystChris LaFemina - AnalystKatja Jancic - AnalystNathan Martin - Equity Research Analyst Operator Good day, and welcome to Peabody Q1 twenty twenty five Earnings Conference Call. All participants will be in lis ...

Financial Data and Key Metrics Changes - In Q1 2025, the company recorded net income attributable to common stockholders of $34 million or $0.27 per diluted share, with adjusted EBITDA of $144 million [27] - The company generated $30 million in free cash flow, net of $47 million of continued development at Centurion [27] - As of March 31, the company held nearly $700 million in cash and had over $1 billion in liquidity, maintaining a cash positive net debt position [28] Business Line Data and Key Metrics Changes - The seaborne thermal segment achieved $84 million in adjusted EBITDA with 32% margins, exceeding production forecasts by exporting an additional 400,000 tons [28] - The seaborne metallurgical segment reported $13 million in adjusted EBITDA, with sales modestly below company targets due to lagging market conditions [29] - The US thermal mines generated $69 million in adjusted EBITDA, with the PRB mines exceeding expectations by shipping 19.6 million tons [30] Market Data and Key Metrics Changes - US generator inventories have declined by more than 25% on a days burn basis since the beginning of the year, indicating strong demand for coal [20] - Coal generation in the US is projected to increase by 5% for the full year, while US coal production is expected to decline by 6% [21] - Thermal coal prices reached four-year lows in March, but demand remains intact with 600 GW of coal generation under construction or in various stages of development, primarily in Asia [22] Company Strategy and Development Direction - The company is focused on cost control and managing its diversified global portfolio to navigate cyclical market softness [5] - The Centurion mine is on budget and ahead of schedule, projected to have a low cost structure and high margins in the steelmaking coal universe [6] - The company supports the US administration's efforts to revitalize the coal industry and expand coal-fired generation, aligning with rising electricity demand [7][10] Management's Comments on Operating Environment and Future Outlook - Management noted that coal fuel generation in the US is up 20% over the prior year, indicating a shift in market share from higher-priced natural gas [10] - The company anticipates increasing demand throughout 2025, with a strong start to the year and expectations for a stronger second half [34] - Management expressed confidence in the long-term demand for coal, citing substantial US coal demand for many years into the future [13] Other Important Information - The company notified Anglo American of a material adverse change (MAC) related to the Moranbah North mine, which remains inactive following a gas ignition event [16] - The acquisition of premium steelmaking coal mines in Australia is under scrutiny due to uncertainties surrounding the Moranbah North mine [17] - The company is exploring a potential partial sale of the Centurion line, independent of the Anglo acquisition process [63] Q&A Session Summary Question: What is the process following the MAC notification regarding Moranbah North? - Management indicated a ten-day period for Anglo to respond, followed by a potential ninety-day cure period to resolve the MAC [40] Question: What constitutes a sustainable resolution for the MAC? - Management stated that a sustainable longwall production must be established for the agreement to proceed, but specifics were not disclosed [45] Question: How does the MAC impact financing processes? - Financing discussions are currently on hold due to uncertainties surrounding the Moranbah North mine [48] Question: What differentiates the current event at Moranbah North from past incidents? - Management emphasized the significant potential impacts of the current situation, which they believe constitutes a MAC [53] Question: How will the executive orders supporting US coal production impact the business? - Management noted that the orders aim to prevent further coal plant closures and encourage long-term contracts, which could benefit the company [87]