Peabody’s Q4 revenue drops on lower met coal volumes

Wednesday, 06 February 2019 21:11:34 (GMT+3)   |   San Diego
       

Peabody today announced its fourth quarter 2018 operating results, including revenues of $1.40 billion, income from continuing operations, net of income taxes of $233.5 million, net income attributable to common stockholders of $252.6 million, diluted earnings per share from continuing operations of $1.97 and Adjusted EBITDA of $273.7 million.

Revenues for the fourth quarter totaled $1.40 billion, an 8 percent decline from the prior year, reflecting 43 percent lower metallurgical volumes, primarily due to lack of production from North Goonyella, and 6 percent lower US thermal volumes, the company said in a statement, adding that the declines were partially offset by strong seaborne pricing and 6 percent higher seaborne export thermal volumes. 

Fourth quarter 2018 net income attributable to common stockholders totaled $252.6 million, including $27.1 million in income from discontinued operations primarily related to gains on actuarially determined liabilities.  Compared to the prior year, net income attributable to common stockholders increased following the company's preferred stock conversion into common in the first quarter 2018.  

Full-year 2018 revenues modestly exceeded the prior year, even with 3 percent lower volumes, due to increased pricing for both seaborne metallurgical and thermal products.  Full-year 2018 income from continuing operations, net of income taxes totaled $645.7 million and net income attributable to common stockholders totaled $544.4 million, with Adjusted EBITDA of $1.38 billion.

Peabody sold 2.3 million tons of seaborne metallurgical coal in the fourth quarter at an average realized price of $131.89 per short ton.  In line with its expectations for the full year, the company shipped 11.0 million tons of seaborne metallurgical coal in 2018 at an average realized price of $141.06 per short ton. 

For full year 2018, Peabody's seaborne metallurgical segment provided $441.4 million in Adjusted EBITDA contributions, which includes $58.0 million of costs associated with the North Goonyella incident.

"Underlying seaborne met and thermal coal conditions remain quite positive and the pace of US coal-fueled power plant retirements is expected to substantially ease in 2019, even as macro concerns of slowing global GDP growth, trade issues and easing commodity prices create cause for caution," said Peabody Executive Vice President and Chief Financial Officer Amy Schwetz. 

In a statement, the company said seaborne metallurgical coal supply/demand balance remains favorable. “India continues to demand metallurgical coal to meet its steel making needs, with metallurgical coal imports rising 5 percent in 2018 over the prior year.  However, Chinese metallurgical coal imports eased 5 million tons due to an increased reliance on domestic supplies and scrap steel usage.  Increased steel production from ASEAN nations also continues to support seaborne metallurgical coal demand.”

However, the company added, “even with continued strength in pricing, supply growth remains muted with metallurgical exports from Australia and the US rising 7 million tons and an estimated 4 million tons, respectively in 2018.”


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