ST. LOUIS — Peabody Energy reported on Thursday $1.8 billion in losses last year and said it had cut 2,000 jobs, as the world’s largest private-sector coal company reeled from the combined effects of reduced energy demand and the continued decline of coal.
The St. Louis-based company reported losses of $128 million for the quarter ending Dec. 31. Sales of coal reached 34 million tons — more than a 16% drop from its quarterly sales a year prior. Quarterly revenue fell 34% to $737 million, from $1.1 billion in the last quarter of 2019.
Year-end revenue fell by more than one-third to $2.9 billion from $4.6 billion the year prior. Year-end losses grew almost tenfold; the company reported $185 million in losses in 2019.
The losses coincided with work stoppages at nine mines and the deep job cuts at Peabody, which, according to the company’s website, still employs 6,600.
“2020 brought immense challenges,” President and CEO Glenn Kellow said on an earnings call with investors. “To Peabody and the coal industry, in particular, it was no different.”
Cheap natural gas and renewable energy have besieged the coal industry for years. The coronavirus pandemic has exacerbated those woes, depressing natural gas prices and overall energy demand.
Kellow said Thursday, though, that the company is well-positioned in the industry. Its future rests largely on its ability to serve growing Asian economies with coal from its Australian mines, and an expanding emphasis on metallurgical coal, used in steelmaking.
But Kellow also said he stood by U.S. operations, with a large presence in low-cost strongholds like Wyoming’s Powder River Basin — home to the nation’s largest mines, by far. Peabody recently looked to push marquee assets there into a joint venture with industry rival Arch Resources in a move that would have combined the nation’s two biggest coal mines, near Wright, Wyoming, under a single operator. A federal judge blocked the proposal in September, saying it would “substantially impair” market competition, and the companies have since abandoned the idea.
Mark Spurbeck, the company’s executive vice president and chief financial officer, said Thursday that recent moves to renegotiate debt, among other things, should also give Peabody “the time needed to continue to pursue cash flow improvements.”
The company, Spurbeck added on the call with investors, was “laser-focused” on maintaining cash flow and “further reducing costs.”