Peabody delivered a poor result at the end of July here; BTU missed expectations with its 2Q result, as persistent commissioning issues at the Centurion mine pushed the Seaborne Metallurgical division into a loss, compounded by weakness in the Powder River Basin and elevated costs across the business. Adjusted EBITDA of US$24m missed consensus by 43%, while the EPS loss of US74c was worse than the US52c expected, sending the shares down more than 10% on the day. The stock’s ~3% YTD drop masks a peak-to-trough drawdown of nearly 47%.
The standout positive was Seaborne Thermal, where EBITDA of US$52.1m comfortably beat expectations, but this was overshadowed by a US$17m loss in Seaborne Metallurgical versus US$9m profit expected. Centurion remains the key challenge, with commissioning costs of US$155/t above guidance and 2026 sales guidance cut to 2.0–2.5Mt, well below the original 3.5Mt target. This was a disappointing result, particularly given Centurion’s importance to Peabody’s growth strategy; hence, we are reviewing our position in the International Equities Portfolio.
- We can see BTU rallying in line with WHC and NHC, but we’re reconsidering its place in the International Equities Portfolio.
MM is long but considering exiting BTU
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