0001064728-25-000115
SEC filingPeabody's Q2 2025 results declined sharply due to lower seaborne coal pricing and the absence of a prior-year insurance recovery.
For the three months ended June 30, 2025, Peabody reported revenue of $890.1 million, down 15% from $1,042.0 million in the same period last year. The decline was primarily driven by lower seaborne coal pricing, particularly in the Seaborne Thermal segment (down 28% per ton) and Seaborne Metallurgical (down 23% per ton). Net loss from continuing operations was $25.6 million, a swing of $236.4 million from net income of $210.8 million in Q2 2024. The prior year benefited from a $109.5 million insurance recovery at Shoal Creek Mine (of which $80.8 million was included in Adjusted EBITDA). Adjusted EBITDA plummeted 70% to $93.3 million, with all seaborne segments contributing to the decline. Diluted EPS from continuing operations was ($0.22) versus $1.43 a year ago.
Seaborne Thermal: Revenue fell 37% to $195.1 million as realized prices dropped $21.21 per ton and volume declined 0.5 million tons. Costs per ton improved 10% to $44.10, but not enough to offset pricing pressure, resulting in Adjusted EBITDA of $33.5 million, down 68%.
Seaborne Metallurgical: Revenue decreased 14% to $252.2 million despite a 10% increase in tons sold. Realized prices fell $34.50 per ton. Costs per ton rose slightly to $118.97, and the segment posted a negative Adjusted EBITDA of $9.2 million compared to $143.6 million last year, which included $80.8 million of Shoal Creek business interruption insurance. Excluding that, the decline was still $62.8 million.
Powder River Basin: This segment was a standout, with revenue up 24% to $275.7 million on a 27% increase in tons sold (4.2 million additional tons). Costs per ton fell 10% to $11.66, and Adjusted EBITDA surged 142% to $43.0 million, driven by volume and lower overburden removal costs.
Other U.S. Thermal: Revenue fell 23% to $155.1 million due to lower volume (-0.8 million tons) from reduced demand and rail issues. Costs per ton increased 8% to $49.39, compressing Adjusted EBITDA to $13.5 million, down 62%.
Corporate and Other: Adjusted EBITDA improved to $12.5 million from $8.5 million, driven by favorable foreign currency remeasurement and higher gains on asset sales, partially offset by lower Middlemount results.
Management's commentary highlights ongoing weakness in seaborne thermal and metallurgical markets due to oversupply and trade policy uncertainty. The Centurion Mine development continues towards full-scale longwall production in February 2026, with longwall shield installation starting in Q4 2025. The planned acquisition of Anglo American's metallurgical coal assets is clouded by a Material Adverse Change notice related to the Moranbah North Mine gas ignition event; no revised agreement has been reached. Peabody revised its 2025 capital expenditure guidance downward to approximately $420 million from $450 million. The One Big Beautiful Bill Act of 2025 is expected to provide $15-20 million in benefits during the second half of 2025, primarily from reduced federal royalty rates. No revenue or earnings guidance was provided.
As of June 30, 2025, Peabody held $585.9M in cash and cash equivalents, down from $700.4M at year-end 2024. Total debt (net of issuance costs) stood at $343.8M, comprising $320.0M in 3.250% Convertible Senior Notes due 2028, a $9.8M BUMA Loan Note, and $19.3M in finance lease obligations. The company's revolving credit facility had $270.7M of undrawn capacity, with only $49.3M in letters of credit outstanding. Total stockholders' equity was $3,674.1M, a slight decrease from $3,708.8M at December 31, 2024, driven by dividends and other comprehensive losses.
The most significant commitment is the planned acquisition of Anglo American's metallurgical coal assets, requiring an upfront cash payment of $2.058 billion, plus $726M in deferred payments over four years, and up to $1.004B in contingent payments tied to coal prices and the restart of the Grosvenor mine. The company has also entered into a bridge loan facility of up to $2.075B to finance the acquisition. Separately, purchase commitments for capital expenditures total $66.8M, all due within 12 months. The company maintains $1.0666B in off-balance-sheet obligations supported by surety bonds and letters of credit, primarily for reclamation bonding.
During the six months ended June 30, 2025, Peabody did not repurchase any common stock, compared to $83.1M in repurchases in the prior-year period. Dividends totaled $18.5M ($0.075 per share quarterly), unchanged from the prior year. Capital expenditures were $164.6M, slightly below the $167.0M in the first half of 2024. Debt repayments were $7.6M, and the company paid $1.8M in debt issuance costs. The company also made a $5.0M discretionary contribution to its qualified pension plan, which allowed for the release of a $37.0M letter of credit.
Peabody reports five segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal, and Corporate and Other. For Q2 2025, total revenue was $890.1M, down 14.6% YoY. Seaborne Thermal revenue fell 36.6% to $195.1M, driven by lower export volumes and prices. Seaborne Metallurgical revenue declined 14.3% to $252.2M. Powder River Basin revenue increased 24.2% to $275.7M, while Other U.S. Thermal revenue fell 23.2% to $155.1M. Segment Adjusted EBITDA totaled $93.3M, a sharp decline from $309.7M in Q2 2024, primarily due to lower margins in the seaborne segments and the absence of a $109.5M Shoal Creek insurance recovery that benefited the prior year.
CFO of $143.1M exceeded net income from continuing operations ($12.7M) by a wide margin, driven by $185.5M in D&A and a $51.3M decrease in receivables, partly offset by a $60.2M decline in payables and $22.9M in postretirement outflows. Capex of $164.6M consumed 115% of CFO, resulting in negative free cash flow before dividends. Capital returns totaled $18.3M in dividends with no share repurchases. Working capital swings were mixed: inventories built $24.2M, while collateral arrangements used $5.3M. Notable items: a $20.0M net gain on disposals and $8.4M unrealized FX option gains boosted CFO. Prior-year period included a $109.5M insurance recovery absent in 2025. Overall, cash generation is solid but capex intensity remains high.