Mr Gregory H. Boyce chairman & CEO of Peabody Energy announced that 2011 marked the best year in Peabody Energy's 129 year history. The company achieved its strongest safety performance and best financial results on record.
He said that "Best practices in safety and operations drive strong results. Since 2007, our revenues have increased 80%; EBITDA has more than doubled; and operating cash flows are up 260%. International operations contribute half of the company's earnings and we expect the Australian and Asian share to rise even more going forward."
Highlights from 2011 include:
A new global safety record of 1.92 incidents per 200,000 hours worked. This reflects a nearly 30% improvement over the company's 2010 performance and the fourth consecutive year of improvement
Record financial results, including new marks for revenues, operating profit, EBITDA, net income, earnings per share and operating cash flows
More than 30 major safety, environmental and corporate honors around the world. Peabody earned recognition from the Foreign Policy Association for ethical and environmental responsibility
Mr Boyce said the global super cycle for coal was alive and well, with rising electricity generation and steel demand in China and India driving strong demand for coal. The International Energy Agency recently forecast a robust 65% increase in global coal use by 2035, projecting that coal will surpass oil and natural gas as the largest energy source in the world within the next quarter century.
Mr Boyce added that Peabody is well positioned against the backdrop of favorable long term supply and demand fundamentals for the global coal industry. He commented on multiple catalysts for the company's continued growth, including:
Favorable demand trends: Coal's demand trends are significant. So, too, are the barriers that constrain coal supplies, including regulations, geology, infrastructure, labor and cost structures. Against this backdrop, Peabody is very well positioned.
Growing coal generation: Electricity generation is coal's largest end customer base, and China and India lead the global build out of coal fueled generation. Over the next five years, we see generation growing by 385 gigawatts. That requires more than 1.3 billion tonnes of additional coal, equivalent to one new 500 MW power plant every three days through 2016.
Increasing steel intensity: Within steel, the mix of population growth and increasing per capita intensity is significant. This has profound implications for metallurgical coal use. In fact, if India, Brazil and China reached a traditional level of maturity in steel intensity relative to more developed countries, global metallurgical coal use would more than double, adding 1.2 billion tonnes of annual consumption.
Peabody's earnings growth and strong margins distinguish the company from peers, Boyce said. The company also is delivering on multiple expansion projects and has a large project pipeline.
Looking ahead, Peabody continues to advance several key focus areas in 2012:
Maintaining excellent performance across core areas of safety and operations
Integrating the company's recent major acquisition into its Australian platform by driving operational improvements and realizing synergies
Advancing organic growth projects to serve growing global demand centers
Strengthening the balance sheet by reducing debt
Mr Boyce said that "Peabody is energy and energy is the essential building block for healthy living and modern society. We are proud to advance energy solutions that are energizing the world."
Source - Peabody Energy
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