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Peabody Announces 2019 Q3 Report

https://en.steelhome.com [SteelHome] 2019-11-12 11:25:38

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Third Quarter 2019 Results

Third quarter 2019 revenues totaled $1.11 billion compared to $1.41 billion in the prior year driven by a 36 percent decline in seaborne metallurgical coal sales volumes and approximately $90 million in lower pricing, excluding the impact of higher Kayenta revenues.

Depreciation, depletion and amortization (DD&A) declined $28.1 million compared to the prior year primarily due to lower contract amortization expense and final recognition of Kayenta Mine expense.  Selling, general and administrative expense (SG&A) decreased 17 percent from the prior year to $32.2 million largely due to a reduction in personnel costs.  Transaction expenses related to the PRB/Colorado joint venture totaled $8.2 million in the third quarter and are included within Adjusted EBITDA.  The company also recorded a $20.0 million impairment charge related to its Wildcat Hills Mine in the Illinois Basin, which is expected to cease operations.  The company expects this action to be cash accretive.

Earnings from equity affiliates totaled a loss of $20.7 million, reflecting the cumulative impact of a delay in resuming and then ramping up production at the independently operated Middlemount joint venture in Queensland following a highwall failure in late June. 

Combined, these impacts resulted in a loss from continuing operations, net of income taxes of $74.3 million compared to $83.9 million in the prior year and diluted loss per share from continuing operations of $0.77 compared to diluted earnings per share of $0.63 in the prior year.  

Third quarter Adjusted EBITDA totaled $150.3 million versus $372.1 million in the prior year, reflecting previously announced effects of pricing, shipments and lower Middlemount earnings. 

T1: 2019 Guidance Targets

Sales Volumes (Short Tons in millions)

PRB

107 – 113

ILB

~16.0

Western

11 – 12

Seaborne Metallurgical

8.5 – 9.0

HCC1

40% – 50%

PCI2

50% – 60%

Seaborne Export Thermal

11.5 – 12.0

NEWC:

60% – 70%

API 5:

30% – 40%

Australia Domestic Thermal

7.5 – 8

Revenues per Ton

Total U.S. Thermal

$17.35 – $17.85

Costs Per Ton (USD per Short Ton)

PRB

$9.25 – $9.75

ILB

$32 – $35

Total U.S. Thermal

$13.95 – $14.45

Seaborne Thermal3

(includes Aus. Domestic Thermal)

$32 – $36

Seaborne Metallurgical (excluding North Goonyella)3

~$100

1 Peabody expects to realize ~80%-90% of the premium HCC quoted index price on a weighted average across its HCC products.

2 Approximately 40% of Peabody’s seaborne metallurgical PCI sales are on a spot basis, with the remainder linked to the quarterly contract. Peabody expects to realize ~80%-90% of the LV PCI benchmark for its PCI products.

3 Assumes 2019 average A$ FX rate of $0.70. Cost ranges include sales-related cost, which will fluctuate based on realized prices.

 

Note 1: Peabody classifies its seaborne metallurgical or thermal segments based on the primary customer base and reserve type. A small portion of the coal mined by the seaborne metallurgical segment is of a thermal grade and vice versa. Peabody may market some of its metallurgical coal products as a thermal product from time to time depending on industry conditions. Per ton metrics presented are non-GAAP operating/statistical measures. Due to the volatility and variability of certain items needed to reconcile these measures to their nearest GAAP measure, no reconciliation can be provided without unreasonable cost or effort.

Note 2: A sensitivity to changes in seaborne pricing should consider Peabody’s estimated split of products and the weighted average discounts across all products to the applicable index prices, in addition to impacts on sales-related costs, and applicable conversions between short tons and metric tonnes as necessary.

Note 3: As of Oct. 28, 2019, Peabody had approximately 97 million shares of common stock outstanding. Including approximately 3 million shares of unvested equity awards, Peabody has approximately 100 million shares of common stock on a fully diluted basis.

T2: Tons Sold (In Millions)  

Tons Sold (In Millions)

Quarter Ended

Nine Months Ended

Sept. 2019

Sept.2018

Sept.2019

Sept. 2018

Seaborne Thermal Mining Operations

4.9

4.8

14.1

13.6

Seaborne Metallurgical Mining Operations

1.8

2.8

6.2

8.7

Powder River Basin Mining Operations

30.2

31.7

80.5

90.3

Midwestern U.S. Mining Operations

4.2

4.9

12.3

14.3

Western U.S. Mining Operations

3.0

4.0

10.0

11.2

Total U.S. Thermal Mining Operations

37.4

40.6

102.8

115.8

Corporate and Other

0.7

0.9

1.6

2.4

Total

44.8

49.1

124.7

140.5

Revised Full-Year 2019 Guidance Ranges

•Expected seaborne thermal volumes of 11.5 – 12.0 million tons

– Reflects increase in required domestic thermal shipments

• Anticipating met volumes of 8.5 – 9.0 million tons

– Dec/Jan pricing arbitrage may provide economic opportunity to defer volumes

• Seaborne met coal costs projected at ~$100 per ton

• Revising Midwest volume guidance to ~16.0 million tons

– Reflects lower customer requirements, negotiated deferrals

• Lowered overall U.S. cost guidance to $13.95 – $14.45 per ton

• Reduced capital spending to $300 – $325 million

• Strong U.S. contracting position heading into 2020

– Nearly all planned Midwest volumes priced at $39 per ton

– 75% of PRB volumes committed based on mid-point of 2019 volume guidance

Link: Official Document


(To contact the reporter on this story: crystal.lin@steelhome.cn or 86-555-2238927)
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