Peabody’s first quarter net income increased 130% to $US51.9 million, compared with $US22.6 million in 2004. Revenues also rose to a new record of $US1.08 billion.
“The Peabody team is on track to achieve higher earnings growth than originally targeted for 2005,” Peabody president Gregory Boyce said. “Market conditions remain very strong in metallurgical and thermal coal markets around the world. We are seeing significant improvement in our largest market, the Powder River Basin, and we expect this trend to accelerate in 2005 and beyond.”
Peabody’s realised prices in the Powder River Basin went up 12% for the quarter, putting the company on track to ship 103 million tons, a record annual amount, from its PRB operations. Peabody is aiming to produce 210-220Mt of coal this year, with sales between 240-250Mt.
“Peabody’s outstanding operational performance continues to strengthen all key financial metrics,” executive vice president Richard Navarre said. “With strong markets and an expanding portfolio of well-run operations, Peabody is on a path to generate record cash flows in coming years.”
The first quarter results was good news for investors also, with EBITDA rising 49% to $US166 million, and earnings per share growing 95% to $US0.39 per share.
On the back of record revenues, Peabody has continued its plan for organic growth. Peabody is in the preliminary stages of a plan for a new mine to exploit the 327Mt of ultra-low sulphur Powder River Basin coal the company acquired this year. The company bought approximately 950Mt of PRB coal reserves in 2004.
In another major project in the midwest, Peabody purchased 70Mt of Illinois and Indiana Coal reserves, properties and equipment for $US61 million. Peabody continued to target 2005 capital expenditures of $US450-500 million.
The company said record safety results were achieved within the US and notable improvements had been made in its new Australian operations, an effort continued into 2005.
Recent data showed Peabody operated three of the four most productive mines in the US last year.
“Peabody’s process improvement initiatives are yielding results in safety, productivity, and cost containment,” said Boyce. “And our sales and trading group continues to sign contracts to further improve results going forward.”
The world's largest coal producer, Peabody operates approximately 30 mines and processing facilities in the US alone.
