Arch Resources Reports Fourth Quarter 2023 Results

"While we made good progress across a range of operating metrics in the fourth quarter, we remain focused on further sharpening our operating execution in our metallurgical segment," said John T. Drexler, Arch's chief operating officer. "In particular, we continue to drive forward with efforts to achieve superior, long-term productivity rates at Leer South, where we anticipate a step-up in output as we progress into the second longwall district late this year. Meanwhile, our thermal operations again generated substantial, supplemental adjusted EBITDA, supported by the return of strong production levels at West Elk."  

Arch's core metallurgical segment contributed adjusted EBITDA of $193.6 million in the fourth quarter. The company is guiding to coking coal sales volume of 8.6 to 9.0 million tons for full year 2024. During January and February, the Curtis Bay terminal in Baltimore experienced weather-related disruptions as well as unplanned and accelerated maintenance requirements, including a force majeure event, that will result in modestly reduced vessel loadings during Q1. Arch views these impacts as timing-related only, with no expected impact on full-year sales volume guidance.

Arch's thermal segment contributed adjusted EBITDA of $26.7 million in the fourth quarter, against capital spending of $7.3 million. Thermal segment margins were supported by a much-improved performance from West Elk, which acted to counterbalance lower shipment levels stemming from a weakening demand environment in the Powder River Basin. Since the fourth quarter of 2016, the thermal segment has generated a total of $1,384.1 million in adjusted EBITDA while expending just $171.8 million in capital. 

Financial, Liquidity and Capital Return Program Update

Consistent with its capital return formula, the board has declared a total quarterly cash dividend of $31.6 million, or $1.65 per share, which is equivalent to 25 percent of Arch's fourth quarter discretionary cash flow. This dividend – which includes a fixed component of $0.25 per share and a variable component of $1.40 per share – is payable on March 15, 2024, to stockholders of record on February 29, 2024.

During the quarter, the company increased its cash, cash equivalents and short-term investments to $320.5 million, as compared to $142.1 million in total indebtedness, for a net cash position of $178.4 million.

"The centerpiece of our value proposition is the return to stockholders of effectively 100 percent of the company's discretionary cash flow over time," Lang said. "With the strategic decision to bolster our cash balance, we believe we have effectively positioned the company to continue the evolution towards a heavier share repurchase model and are now ready to pursue more opportunistic share repurchases in the event of a market pullback."

During the quarter just ended, the company deployed $3.0 million to repurchase approximately 20,000 shares at an average price of $151.96 per share. In total, Arch has now used common stock and convertible notes repurchases to manage and reduce potential dilution impact by approximately 4.3 million shares.       

Arch has deployed a total of $1,243.0 million under its capital return program since its relaunch two years ago – inclusive of the just-declared March dividend – including $694.2 million, or $37.42 per share, in dividends and $548.9 million in common stock and convertible notes repurchases. Since the second quarter of 2017 – and inclusive of the program's first phase – Arch has deployed a total of $2.2 billion under its capital return program. As of December 31, 2023, Arch had $217.7 million of remaining authorization under its existing $500 million share repurchase program.

ESG Update

During 2023, Arch maintained its exemplary environmental, social and governance performance. Arch's subsidiary operations achieved an aggregate total lost-time incident rate of 0.55 per 200,000 employee-hours worked during full-year 2023, which was nearly four times better than the industry average. In addition, the Leer mine completed 519 consecutive days and nearly 1.8 million employee-hours worked without a lost-time incident, while the Leer South mine completed 329 consecutive days and nearly 1.5 million employee-hours worked without a lost-time incident.   

On the environmental front, the company recorded zero environmental violations under SMCRA versus an average of 11 by 10 of its large coal peers. Arch subsidiary operations also recorded zero water quality exceedances – against more than 100,000 water quality parameters tested – for the third year in a row.

In addition, the Leer mine recently achieved independent verification at a Level A for all protocols comprising the TSM initiative. Leer is the first mine of any type to achieve and verify this performance level through TSM's new subscription program, which allows any mine anywhere in the world to implement this globally recognized sustainability initiative for the mining industry.

In 2023, Arch completed $15.9 million in final reclamation at its Powder River Basin operations as it continued to shrink its operating footprint there, and its thermal mine reclamation fund has now reached $142.3 million, which should render it self-sustaining at current interest rates.

Market Update

Despite lackluster steel market dynamics, coking coal markets appear to be reasonably well-supported at present. Arch's primary product, High-Vol A coking coal, is currently being assessed at $262 per metric ton on the U.S. East Coast, which – while a step-down from the recent high-water mark of $300 per metric ton experienced early in Q4 – is still an advantageous price that translates into strong margins for the company's metallurgical segment. Meanwhile, the price of Australian Premium Low-Vol coal is higher still, at $315 per metric ton, creating an attractive arbitrage opportunity for select U.S. volumes moving into the Asian market.

Ongoing operating challenges in major coking coal supply regions – along with persistent underinvestment in coking coal supply – continue to support healthy supply-demand fundamentals even in the face of steel market weakness, in Arch's estimation. Coking coal exports from Australia – the world's largest supplier to the seaborne coking coal market – slipped further in 2023, ending the year down nearly 40 million metric tons, or approximately 20 percent, versus the peak year of 2016. Modest growth in U.S. and Canadian coking coal exports only served to offset around half of the decline experienced by Australian producers in 2023. 

Arch continues to extend the market reach of its metallurgical segment, securing a total of six large, new Asian steelmaking customers during 2023. The company shipped approximately 40 percent of its total coking coal output into the Asian market during 2023 and expects that percentage to grow markedly in the years ahead.

Looking Ahead

"Looking ahead to full-year 2024, we expect a step-up in coking coal production as well as another first-quartile cost performance," said Lang. "In addition, we anticipate another solid contribution from our thermal assets, supported by the return to normalized production levels at West Elk. In short, we expect to again generate substantial discretionary cash flow to fuel our robust capital return program, while driving forward with our consistent and proven plan for long-term value creation for our employees, customers and stockholders."

				2024
				Tons			$ per ton
Sales Volume (in millions of tons)
Coking				8.6	-	9.0
Thermal				50.0	- Werbung Mehr Nachrichten zur Arch Resources Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 08:25 - PR Newswire Ninety One UK Ltd - Form 8.3 - Anglo American Plc 03:17 - PR Newswire Commerzbank AG - Pre-stabilisation 02:30 - PR Newswire Pacific Assets Trust Plc - Annual Report for the Year Ended 31 January 2024 Saubere Energie    Milliardärsinvestoren sehen enorme Chancen in der alternativen Energie der nächsten Generation weiterlesen» Anzeige wo-site-teaser-box-16797_site-teaser-box_2024-04-30_07%253A00%253A00_2024-05-01_09%253A00%253A59