Peabody reported a net loss attributable to common stockholders of $119.5 million for the first quarter of 2022, compared to a net loss of $80.1 million in the prior-year quarter. Peabody’s first-quarter 2022 results included a $301 million charge for unrealized mark-to-market losses related to its coal hedging activities and a $23.5 million net loss on early debt extinguishment. Peabody had adjusted EBITDA of $327.5 million in the first quarter of 2022 compared to $61.1 million in the first quarter of 2021. Revenue from coal sales increased 58% to $1.04 billion compared to the prior-year quarter, as higher realized prices were partially offset by lower volumes.
“In the first quarter, we set the stage for the remainder of the year, addressing challenges to delivering projected volumes and costs across the platform and continued to strengthen our balance sheet while expanding the value offering we provide our customers and increasing our sold coal position,” Peabody President and CEO Jim Grech said.
Peabody ended the quarter with $848 million of cash, cash equivalents and restricted cash. The company continued to strengthen the balance sheet, retiring approximately $42 million of senior secured debt during the quarter and utilized proceeds from the $320 million convertible senior unsecured notes offering to retire higher cost senior secured debt and extend maturities to 2028. As a result of these activities, the company recorded a net loss on early debt extinguishment of $23.5 million.
As a result of unprecedented upward volatility in Newcastle coal pricing, the company posted $351.6 million of additional cash margin associated with the company’s coal hedging activities in the first quarter and had $481.7 million posted in support of its coal hedges at March 31, 2022. During the first quarter, the company completed a financing arrangement to support near-term liquidity in light of the cash margin requirements. The company received gross proceeds of $225 million under the facility, which were repaid in full with proceeds from the sale of 10.1 million shares under the related ATM program.
To further reduce exposure to additional coal hedge margin requirements, the company converted 750,000 metric tons (mt) of financial hedges into fixed price physical sales over the next 12 months eliminating further margin requirements on these tons. With these transactions, 1.4 million mt remain outstanding with 900,000 mt projected to settle over the remainder of 2022.
During the first quarter the company said it overcame production and logistic challenges in Australia related to record rainfall and COVID-induced labor shortages, and instituted recovery plans to recapture volumes over the remainder of the year.
Peabody invested more than $40 million in its Powder River Basin (PRB) and Midwest mines to enable higher production levels over the remainder of 2022. It also advanced project activity to potentially re-enter the south workings of North Goonyella and develop 70 million tons of reserves and started development at Wambo Underground for three additional longwall panels that will extend the mine life to 2026.
Peabody’s committed 2023 PRB sales increased to 59 million tons.