Peabody reports lower revenue and net income for Q3 2018

Tuesday, 30 October 2018 23:03:01 (GMT+3)   |   San Diego

Peabody today announced its third quarter 2018 operating results, including revenues of $1.41 billion, compared to $1.48 billion in Q3 2017. Net income reached $83.9 million, compared to $233.7 million in Q3 2017.

In a press release, the company said that within metallurgical coal fundamentals, third quarter low-vol hard coking coal spot pricing continued to be favorable to historical averages and was in line with the prior quarter. Pricing reached a high of $209 per ton during the third quarter with an average of $189 per ton. The third-quarter index settlement price for premium low-vol hard coking coal was $188 per ton compared to $170 per ton in the prior year. The benchmark for low-vol PCI in the third quarter was settled at $150 per ton compared to the benchmark settlements of $115 and $127 per ton in the prior year.  In addition, the fourth quarter benchmark price for low-vol PCI has been settled at $139 per ton.  

The company said seaborne metallurgical coal pricing has been supported by a 5 percent increase in global steel production through September. India seaborne metallurgical coal demand increased 4 million tons compared to the prior year through September, more than offsetting a 2 million ton decline in China imports.   

Regarding seaborne metallurgical coal supply, Peabody said overall growth remains limited with the greatest increases from Australia and the US.  While Australian metallurgical coal exports rose 2 million ton year-to-date through September, lower 2017 volumes reflect the impacts of Cyclone Debbie. 

In the US, Peabody said coal demand has been impacted by weak natural gas pricing, coal plant retirements and increased renewable generation, despite a 4 percent increase in total generation load over the prior year through September.  Overall, US coal production has declined 12 million tons year to date through September compared to prior year levels.  Lower production and increased thermal coal exports have reduced overall utility stockpiles to approximately 100 million tons, the lowest levels since 2005.    

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