Peabody Earnings Collapse as Centurion Ramp Drags On
Peabody Energy's adjusted EBITDA fell to $24.0 million in the second quarter, an 83% drop from a year earlier, as costs at its new Centurion metallurgical mine outran higher coal prices.
Peabody Energy (BTU), the St. Louis-based coal producer, reported second-quarter adjusted EBITDA of $24.0 million, down from $82.5 million in the first quarter and $93.3 million a year earlier. The net loss attributable to common stockholders widened to $(90.6) million, or $(0.74) a diluted share, from $(32.4) million, or $(0.27) a share, in the prior quarter.
The deterioration marks a third straight quarter of sequential decline. Net income fell from $10.4 million in the fourth quarter of 2024 to a loss of $(32.4) million in the first quarter of 2025 and then to $(90.6) million in the second, while adjusted EBITDA slid from $118.1 million to $82.5 million to $24.0 million over the same span. The pattern points to a structural cost issue rather than a single weak quarter, centered on the company's Centurion metallurgical coal project in Australia.
Revenue rose to $1,003.2 million from $973.3 million in the first quarter and $890.1 million a year earlier, but operating costs and expenses climbed faster, to $953.9 million from $864.7 million and $789.4 million, compressing margins despite the top-line gain.
The Seaborne Metallurgical segment posted an adjusted EBITDA loss of $(17.0) million, deeper than the $(7.0) million loss in the first quarter, even as realized pricing rose 7.1% sequentially to $148.04 a ton. Centurion commissioning costs remained elevated, pushing the segment's margin per ton to $(7.04) from $(3.44) in the first quarter and $9.90 as recently as the fourth quarter of 2024. Peabody narrowed its full-year Centurion sales target to 2.0 million to 2.5 million tons, a shift from the prior quarter's framing of the mine "progressing toward full longwall production".
The Powder River Basin turned unprofitable for the first time in the four-quarter comparison, with adjusted EBITDA of $(7.1) million versus $23.7 million in the first quarter, as volumes fell to 16.4 million tons from 21.2 million amid mild weather and extended plant maintenance. Other U.S. Thermal EBITDA slipped to $26.9 million from $37.8 million on rail outages tied to heavy rainfall, though it remained above the $13.5 million posted a year earlier. Seaborne Thermal was the lone bright spot, with EBITDA rising to $52.1 million from $48.5 million as revenue per ton climbed 12.4% to $74.85 on Asian power-generation demand.
Peabody raised its full-year seaborne thermal volume guidance by 200,000 tons to 12.7 million tons, while lifting seaborne metallurgical cost guidance by roughly $10 a ton and Powder River Basin cost guidance by $0.25 a ton, due to lower first-half shipments and elevated Centurion contract labor and materials costs.
During the quarter, Peabody issued $250 million of 0.5% convertible notes due 2031 with a capped call at $50.61 a share and used the proceeds toward repurchasing $241.2 million of its 3.25% 2028 convertible notes for $386.8 million in cash, retiring roughly 5.0 million shares in the process. The company also revised its U.S. and Australia surety arrangements, cutting reclamation cash collateral requirements by about $350 million, or 43%, following the June 15 termination of its 2020 Transaction Support Agreement; restricted cash and collateral fell to $459.8 million at June 30 from $844.1 million at the end of 2024.
Cash and cash equivalents declined to $526.3 million from $575.3 million at year-end, with total liquidity at $959.1 million after the debt refinancing and note repurchase. Peabody also expanded its revolving credit facility to $400 million, a capacity increase first disclosed in the quarter.