St. Louis, Missouri-based coal producer Peabody announced that first quarter 2017 revenues increased 29 percent from Q1 2016 to $1.33 billion. Net income increased $287.2 million year-on-year to $122.1 million, the highest net income in nearly five years.
"Peabody's first quarter results were significantly improved over the prior year across the platform, reflecting sharply higher coal demand in the United States and expanded Australian margins for both thermal and metallurgical coal," said Peabody President and Chief Executive Officer Glenn Kellow. "Whilst several temporary issues in Australia prevented the quarter from meeting our full potential, our performance was greatly improved with excellent cash generation from our operations. We look forward to advancing with a strengthened balance sheet, rebounding shipments in Queensland, and retention of the Metropolitan Mine in New South Wales."
Despite lower-than-expected coal demand, US coal shipments increased 14 percent, limiting coal stockpile draws. For full-year 2017, Peabody projects US coal consumption from electricity generation to increase approximately 30 to 40 million tons compared to 2016 levels.
In a statement, the company said seaborne metallurgical coal demand remained strong in the first quarter, led by a 6 percent increase in global steel production. Metallurgical coal imports in China rose 6 million tons in the quarter, driven by improved economic growth and a 5 percent increase in Chinese steel consumption on infrastructure growth and new construction. In addition, India metallurgical coal imports increased 4 percent compared to 2016 on strong steel production. Metallurgical coal supply disruptions due to Cyclone Debbie in Australia have led to a sharp rise in spot prices as negotiations for the second quarter metallurgical coal benchmark have been deferred.