Peabody Energy Corp. (BTU) stock prices were up by 2.52% as of the market closing on May 14th, 2021, bringing the price per share up to USD$6.50 at the end of the trading day. Subsequent pre-market fluctuations have seen the price rise by another 0.77%, bringing it up to USD$6.55.
Largely as a result of the impact of lower volumes being sold, lower prices of volume sold, and sales mix, BTU reported a decrease in revenue. The first quarter of the fiscal year 2021 reported USD$631.3 million, down from the USD$846.2 million reported in the same time period of the prior year. As an indicator of the success of BTU’s ongoing cost reduction program, selling, general, and administrative expenses were down by 13% from the prior year period to USD$21.7 million.
Depreciation, depletion, and amortization (DD&A) was down to USD$68.3 million, a 36% decrease from reports from the previous year. This decrease is largely a result of the impairment at the North Antelope Rochelle Mine in the second quarter of 2020 in conjunction with lower volumes being sold. Interest expense saw a significant increase from the period year, being reported at USD$19.3 million for the fiscal year 2020. This is largely attributable to a one-time expenditure of USD$10.6 million as part of the company’s refinancing transaction. Higher borrowing costs and amortization of debt issuance costs also facilitated the year-over-year increase in interest expenses.
Solid Liquidity Position
BTU reported operating activities to have generated USD$71 million in cash for the first quarter of the fiscal year 2021. The company also reported having repaid debt amounting to USD$54 million, with USD$623.7 being reported in cash, cash equivalents, and restricted cash as of the end of Q1 2021. The quarter also reported one-time transactions related to the refinancing transactions, with USD$33 million in refinancing fees, and USD$40 million in debt repayment.
Cash Flow Situation
The company posted USD$43.5 million of collateral under its accounts receivable securitization facility on account of outstanding letters of credit temporarily exceeding the balance of eligible receivables at the end of the quarter. BTU reported investing cash flows that included USD$50 million related to capital expenditures, as well as USD$34 million of net contributions to joint ventures. At the forefront of these ventures is the upcoming capital expenditure for the United Wambo JV transition.
Future Outlook for BTU
Armed with a solid liquidity position and promising financials over the past year that saw global economies succumb to the devastation of the coronavirus pandemic, BTU is poised to accelerate its growth. Current and potential investors are hopeful that the company can continue to leverage the resources at its disposal so as to usher in significant and sustained increases in shareholder value.