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Coal Producer Sees Big Gains from Higher Demand and Prices
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Shares of Peabody Energy Corp. rose by 10% after the leading U.S. coal producer reported Q4/21 and FY/21 financial results that included a 72% YoY increase in Q4/21 revenue.

Leading U.S. coal producer, Peabody Energy Corp. (BTU:NYSE), owner of 17 active coal mining operations in the U.S. and Australia, today announced fourth quarter and full year 2021 financial results for the period ended December 31, 2021.

The company reported that in Q4/21 revenues increased by 72% to $1,264.6 million, compared to $737.2 million in Q4/20. The company advised that the increase was primarily due to significant realized price improvements for both seaborne metallurgical (met) coal and thermal coal.

The firm stated that in Q4/21 it posted net income attributable to common stockholders of $513.0 million, or $3.93 per diluted share, versus a net loss of $129.2 million, or a loss of $1.32 per diluted share in Q4/20.

The company added that in Q4/21, adjusted EBITDA increased substantially to $444.4 million, compared to $103.2 million during Q4/20. The company explained that the 330% increase was attributed largely to higher seaborne margins.

Peabody Energy's President and CEO Grech commented, "Our robust fourth quarter results further demonstrate the capability of our diverse mine portfolio which continues to benefit from strong market fundamentals driven by the vital necessity for coal to produce reliable energy and steel to fuel the global economy…We continue to experience strong market dynamics, and as a result we have significant forward sales commitments and are adding incremental production capacity to meet market demand for our products, while remaining focused on cost competitiveness."

The company advised that for FY/21 revenues increased to $3,318.3 million, up from $2,881.1 million in FY/20.

Peabody stated that for FY/21 it earned net income attributable to common stockholders of $360.1 million, or $3.22 per diluted share, versus a net loss of $1,870.3, or a net loss of $19.14 per diluted share during FY/20.

The company added that it recorded adjusted EBITDA of $916.7 million in FY/21, versus adjusted EBITDA of $258.8 million during FY/20.

The company indicated that in Q4/21, its seaborne thermal segment shipped 4.6 Mt of which 2.7 Mt was exported and the remaining 1.9 Mt was sold domestically. The firm listed that during the most recent quarter, its Wilpinjong operation shipped 3.5 Mt at an average realized price of $48/ton, and for FY/21 it posted sales of 13.2 Mt.

Peabody stated that in Q4/21, its Seaborne met segment shipped 1.6 Mt at an average realized price of $211/ton in Q4/21, and in addition, its PRB segment shipped 22.5 Mt at an average realized price of $10.99/ton.

The company offered some general forward guidance and stated that for FY/22 it expects that volumes in its U.S. thermal business will be higher versus the previous year as both its Powder River Basin (PRB) and Other U.S. Thermal segments anticipate strong growth to meet rising customer demand.

The company noted that the prices for all base volumes are already priced but any incremental production will be subject to pricing in the spot market. The firm indicated that its cost per ton produced is expected to rise due to higher fuel prices and royalties, as well as higher incremental near-term production costs.

Peabody advised that seaborne thermal volumes are expected to remain constant with the prior year. The company stated that, "Robust margins from anticipated strong prices are expected to more than offset higher royalties and fuel prices."

The company noted that for FY/22, it expects Seaborne met coal volumes to increase substantially as a result of full-year production at its Metropolitan and Shoal Creek projects. The firm pointed out that similar to its thermal operations, it expects to earn robust margins from higher anticipated prices that will more than offset higher fuel costs and royalty payments.

Peabody Energy is a leading U.S. coal producer headquartered in St. Louis. Mo. The firm owns interests in 17 active coal mining operations in the U.S. and Australia that produce both thermal coal to fuel electrical power generation for emerging and developed countries and hi-temp met (coking) coal necessary for manufacturing steel.

Peabody Energy began the day with a market cap of around $1.7 billion with approximately 127.4 million shares outstanding and a short interest of about 6.4%. BTU shares opened more than 6% higher today at $14.44 (+$0.85, +6.25%) over yesterday's $13.59 closing price. The stock has traded today between $14.36 and $16.46 per share and closed for trading at $14.94 (+$1.35, +9.93%).


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