Peabody Energy Corporation (NYSE:BTU) Q3 2023 Earnings Conference Call October 26, 2023 11:00 AM ET

Company Participants

Karla Kimrey - Vice President-Investor Relations & Communications

Jim Grech - President & Chief Executive Officer

Mark Spurbeck - Chief Financial Officer

Conference Call Participants

Lucas Pipes - B. Riley Securities

Nathan Martin - Benchmark

Operator

Good day and welcome to the Peabody's earnings call for the Third Quarter of 2023. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Karla Kimrey. Please go ahead.

Karla Kimrey

Good morning, and thanks for joining Peabody's earnings call for the third quarter of 2023. With me today are President and Chief Executive Officer, Jim Grech; Chief Financial Officer, Mark Spurbeck; and our Chief Marketing Officer, Malcolm Roberts.

Within the earnings release, you'll find our statement on forward-looking information, as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the Securities and Exchange Commission.

I'll now turn the call over to Jim.

Jim Grech

Thanks, Karla, and good morning everyone. In the third quarter of 2023, we delivered strong operational results with better-than-expected production and effective cost management. We also advanced initiatives at Shoal Creek in North Goonyella that illustrate our ongoing commitment to continue investing in our seaborne metallurgical portfolio.

During the quarter, our Board approved full funding at North Goonyella for the completion of initial development through the commencement of longwall operations in 2026. We are also excited to announce that we have reached an agreement to acquire a large portion of the Wards Well coal deposit adjacent to our existing North Goonyella mine. This is a tremendous opportunity to extend a world-class coal deposit and leverage our existing infrastructure and equipment. Before I expand on the quarter, I want to thank our global employees for their continued focus and commitment to working safely and efficiently.

Now, turning to the global coal markets. Seaborne thermal coal markets remained volatile during the quarter with modest pricing improvements. Robust, but moderating coal and natural gas inventories in the Northern Hemisphere have continued to weigh on demand for high-energy thermal coal, coupled with better supply prospects due to drier weather on Australia's East Coast, resulting in Newcastle coal trading within a range of $130 to $160 a ton. China's year-to-date imports of lower-grade thermal coals continue to significantly surpass the prior year, with an increase in the annual thermal coal input run rate of approximately 93% over 2022 levels. India has also increased seaborne market participation, as our power demand continues to grow.