Peabody expects seaborne met volumes to increase, thanks partially to full year production ramping up at Shoal Creek (above) in the first quarter. (Photo: Peabody)
Peabody announced its fourth-quarter 2021 operating results, including revenues of $1.264.6 billion, net income attributable to common stockholders of $513 million, diluted earnings per share from continuing operations of $3.90, and adjusted EBITDA of $444.4 million.
During the quarter, the company generated free cash flow of $426.6 million and retired an additional $200 million of senior secured debt, resulting in approximately $420 million of debt retirements year to date, more than 26% of debt outstanding at the start of the year.
“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,” Peabody President and Chief Executive Officer Jim Grech said. “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.”
Adjusted EBITDA totaled $444.4 million compared to $103.2 million in the prior year, a 331% increase, primarily due to higher seaborne margins.
Full-year 2021 revenues totaled $3.318.3 billion compared to $2.881.1 billion in the prior year primarily due to improved seaborne pricing in the second half of the year.
During the fourth quarter, the seaborne thermal segment shipped 4.6 million tons, including 2.7 million export tons at an average realized price of $96 per ton and 1.9 million tons sold under domestic contracts. Tons sold for the quarter were negatively impacted by 600,000 tons due to heavy rainfall in the Hunter Valley associated with the La Niña weather pattern and continued COVID-related staffing shortages. Fourth quarter seaborne thermal segment costs of $33.45 per ton increased 24% compared to the prior year, primarily due to 84% higher sales realizations resulting in higher royalties, higher fuel prices and weather-related lower volume.
In the fourth quarter, Wilpinjong shipped 3.5 million tons at an average realized price of $48 per ton, which included 1.6 million tons of export sales at an average realized price of $78 per ton and 1.9 million domestic tons at an average price of $22. Tons sold for the quarter were negatively impacted by approximately 0.4 million tons due to the weather and COVID related staffing impacts.
Peabody ended the quarter with $954.3 million of cash and cash equivalents, a $367.3 million increase over the prior quarter. In the fourth quarter, the company generated $438.4 million of operating cash flow and used $11.8 million of investing cash flow, resulting in free cash flow of $426.6 million.
U.S. thermal volumes are expected to be higher than the prior year as both the Powder River Basin and other U.S. thermal segments anticipate higher production to meet customer demand, according to the company.
Essentially all base volumes are priced and committed while incremental volumes anticipated in the PRB from ongoing one-time investments in production capacity remain open to spot pricing.
Cost per ton are anticipated to increase compared to the prior year as a result of higher royalties and fuel prices, in addition to incremental costs to increase near term production.
Seaborne thermal volumes are expected to be consistent with prior year.
Robust margins from anticipated strong prices are expected to more than offset higher royalties and fuel prices.
Seaborne met volumes are expected to increase substantially resulting from a full year of production at Metropolitan and Shoal Creek, with Shoal Creek ramping up longwall production through the first quarter.
Robust margins from anticipated strong prices are expected to more than offset higher royalties and fuel prices.
