Strength to strength for Peabody

PEABODY cemented its place as coal company of year, reporting 2004 net income of US$175.4 million, up significantly on prior year earnings of $31.3 million.
Strength to strength for Peabody Strength to strength for Peabody Strength to strength for Peabody Strength to strength for Peabody Strength to strength for Peabody

Peabody's Harris No. 1 Mine, West Virginia.

Angie Tomlinson

As a result of increasing global demand, Peabody set another industry record with 227.2 million tons sold in 2004. Revenues include $335 million in contributions from operations acquired in Colorado and Australia during 2004.

“The continued improvements in market conditions, our newly acquired mines and newly acquired mines and new sales agreements allow Peabody to target significantly higher results for 2005," Peabody chief Irl Engelhardt said.

Fourth quarter net income totaled $67.9 million, up significantly on 2003 figures.

Fourth quarter results included $279.8 million in increased revenues and $11.5 million in insurance recoveries related to geologic issues expensed in prior periods. These results overcame a $19.6 million increase in energy, explosive and roof bolt costs, and approximately $10 million from global transportation constraints.

Capital expenditure for 2004 was $264 million. Peabody is targeting 2005 capital expenditures of $450-$500 million, which includes new longwall equipment to improve the long-term efficiency and capacity at its new Colorado and Australia underground operations; investments to extend the lives of mines that supply the metallurgical markets; and the next installment of $115 million for Powder River Basin reserve payments.

Against the backdrop of continuing strength in coal markets, Peabody is targeting 2005 EBITDA of $750-$850 million. EBITDA for 2004 was $559.2 million.

Production for 2005 is expected in the 210-220 million ton range, with total sales volume of 240-250 million tons.