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Sep 30, 2020
Peabody Energy Q3 2020 Earnings Report
Peabody Energy's Q3 2020 earnings were impacted by lower volumes, mix changes, and weaker seaborne pricing, but driven by strong cost performance within the thermal segments.
Key Takeaways
Peabody Energy reported a revenue of $671.0 million, a net loss of $67.2 million attributable to common stockholders, and an adjusted EBITDA of $95.4 million for Q3 2020. The company drove strong cost performance within their thermal segments, including record-low PRB costs per ton.
Third quarter revenues declined 39 percent year-over-year to $671.0 million.
Operating costs and expenses also fell by 39 percent, reflecting cost-saving initiatives and lower volumes.
The company reached a standstill agreement with its surety bond providers for the company’s $1.6 billion surety program.
Peabody expects to continue discussions with its revolving credit lenders and 2022 noteholders to effectuate a holistic transaction.
Revenue by Segment
Forward Guidance
Fourth quarter seaborne volumes are expected to improve modestly, while U.S. thermal volumes are expected to decline slightly compared to the third quarter. Seaborne met costs are anticipated to rise primarily due to a planned longwall move at Metropolitan and changes in product mix, while seaborne thermal costs are expected to be largely in line with the third quarter.
Positive Outlook
- Current 2021 market expectations reflect improvement in seaborne coal demand as economies continue to recover from COVID-19.
- Modestly higher forward natural gas prices are expected to offset the impact of additional retirements within the U.S. thermal market.
- Sharing of production at the United Wambo joint venture is anticipated to begin later this year.
- Middlemount is beginning to see the benefits of a recent change in management earlier this year, along with recognizing cost improvement initiatives.
- Fourth quarter Middlemount volumes are fully committed amid improving customer demand.
Challenges Ahead
- Based on the company’s current outlook, it is probable that Peabody’s fourth quarter 2020 results will not be sufficient to meet the minimum required net leverage ratio as defined under the revolving credit agreement.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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