ARLP - Coal Finally Peaking In 2024: Challenges For Peabody Energy

2024-07-01 12:10:18 ET

Summary

• The U.S. exit from coal is following a well-worn path which resulted in the end of the UK coal industry. China and India have a more complicated coal story.
• There's a lot of challenging news about coal’s role in US power production.
• Despite a poor Q1 2024, Peabody Energy’s share price has been maintained, being up 2.5% year-on-year, although a significant share purchase program may have helped.
• In Q1 2024 reporting BTU management announced that to date $430 million (of $1 billion allocated) had been spent on share repurchase, with just $50 million spent on dividends.
• While Peabody is cashed up, the company doesn’t believe in rewarding shareholders with a significant dividend, even after Elliott Management's influence wanes.

I started writing for Seeking Alpha in 2014 and my first article concerned Peabody Energy ( BTU ) " Peabody Energy Corporation CEO Says Coal Is Still On Top, But Is It?" Greg Boyce, Peabody’s CEO in 2014, claimed that coal’s difficulties were temporary and that the industry needed to push back from a “symbolic clean energy push”. Greg Boyce predicted that coal would remain the world’s leading fuel for the next decade. A lot has changed since 2014, including bankruptcy leaving small shareholders stranded while Peabody became an aggressive activist target and relisted in 2016. Since then renewables have proven to be a little more than a “fad”....

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