Q1 2024 Peabody Energy Corp Earnings Call

Thomson Reuters StreetEvents05-03

Participants Karla Kimrey; Vice President, Investor Relations & Communications; Peabody Energy Corp James Grech; President, Chief Executive Officer, Director; Peabody Energy Corp Mark Spurbeck; ...

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James Grech; President, Chief Executive Officer, Director; Peabody Energy Corp. Mark Spurbeck; Executive Vice President and Chief Financial Officer; Peabody Energy Corp. Malcolm Roberts; Chief Marketing Officer; Peabody Energy Corp. Good day and welcome to the Peabody First Quarter 2024 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions to ask a question. You may press star, then one on your touchtone phone to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Carla Kim. Ray, please go ahead.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"BTU":"Peabody"},"translate_title":"Q1 2024年皮博迪能源公司收益看涨期权","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BTU":1},"content_text":"Participants\nKarla Kimrey; Vice President, Investor Relations & Communications; Peabody Energy Corp\nJames Grech; President, Chief Executive Officer, Director; Peabody Energy Corp\nMark Spurbeck; Executive Vice President and Chief Financial Officer; Peabody Energy Corp\nMalcolm Roberts; Chief Marketing Officer; Peabody Energy Corp\nLucas Pipes; Analyst; B. Riley Securities\nNathan Martin; Analyst; The Benchmark Company LLC\nKatja Jancic; Analyst; BMO Capital Markets\nPresentation\nOperator\n Good day and welcome to the Peabody First Quarter 2024 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions to ask a question. You may press star, then one on your touchtone phone to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Carla Kim. Ray, please go ahead.\nKarla Kimrey\n Good morning, and thanks for joining Peabody Energy Coal for the first quarter of 2024. With me today are President and CEO, Jim Brenn, CFO, Mark Strobeck, and our Chief Marketing Officer, Malcolm Roberts. Within the earnings release, you will find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures, and we encourage you to consider the risk factors referenced there along with our public filings with the SEC. Now I will turn the call over to Drew.\nJames Grech\n Thanks, Carlos, and good morning, everyone. First quarter operational results were highlighted by a number of challenges and successes that were unforeseen production challenges in Australia that are now behind us for thermal coal shipments in the US were impacted by unseasonably warm winter weather and low natural gas prices within our seaborne met segment, Shoal Creek continues to exceed production expectations. Although shipments had been hampered by the failure of the Demopolis block, we continued to strategically invest in our portfolio through the development of Centurion and completed the acquisition of the adjacent wards well coal deposits, which extend the mine life to over 25 years before I expand on the markets, I want to thank our global employees for their continued focus and commitment to working safely and efficiently. Now turning to the global coal markets, seaborne thermal coal markets traded within a tighter range for the first quarter through normal winter and low natural gas prices have continued to weigh on demand for thermal coal, coupled with a steady supply from the East Coast of Australia, resulting in Newcastle coal trading within a range of 120 to $135 per ton. Asian thermal coal imports are expected to remain robust with China continuing to show increases in electricity demand with first quarter seaborne thermal coal imports estimated at a year-over-year increase of approximately 15% within the seaborne metallurgical coal market. Coking coal prices declined during the quarter. Metallurgical coal demand was hampered by thin steel margin globally, except for India, where robust economic output supporting steel making profitability. Pta prices also retreated during the quarter, however, not to the extent of higher quality coking coals. During April, we have seen improving steel margin and seasonal restocking, providing pricing support to metallurgical coal markets in the United States. Electricity generation for the first quarter of 2020, Ford proved to be particularly challenging with a warm winter and significant significantly lower gas prices resulting in coal share of electricity generation nationally declining to approximately 15% during the first quarter. With that said, coal continues to be a critical critical component to the country's energy generation. When looked at regionally in the U.S. as an example, full power was relied upon and accounted for over 40% of generation in the MISO and SPP regions in various instances in January 2024, again, proving the importance of coal for a reliable grid. And moving on to our operating segments. Seaborne thermal segments had higher volumes than anticipated with additional warping on volumes going into the domestic market as a carryover from the train derailment on the mainline in December, average realized prices and costs per tonne were lower than anticipated due to higher for higher production are working on where we opportunistically mined some higher scenes, which we do when the market supports it to higher production at Wilpinjong was offset by an extended longwall ramp-up at Longbow. Looking forward, we expect a higher proportion of Newcastle spot coal due to increased production from the Wambo complex seaborne met segment. Shipments were in line with expectations. Volumes were lower than ratable for the year due to an anticipated longwall move at Metropolitan and mine sequencing at the C and D segment cost per ton were at the high end of our range, impacted by an unplanned Coppabella dragline outage and acceleration of planned coal prep plant repairs at the CM JV, partially offset by higher production at Shoal Creek, our sales mix was impacted due to mining some lower-quality coals, the CMDB due to mine sequencing. As we look forward to the full year, our sales mix should improve with additional sales and Shoal Creek through the anticipated opening of the Demopolis block in the PRB, shipments were lower than expected as a result of an unseasonably warm winter and prompt natural gas prices that averaged $2.10. Segment cost per ton came in higher than expected due to lower volumes, but were somewhat offset by rationalization of discretionary cost and hollow PRB demand for the quarter was challenged. We are contracted to 85 million tons for the year. Our full year guidance assumes a normal summer and fall with customers meeting our commitments, our customers have different demands or needs. We will work with them to be responsive while still retaining the full value of our contracts. In other U.S. thermal shipments were below expectations as we had a few customers reduced their shipments due to high inventories and low natural gas pricing segment margins were higher than anticipated due to favorable sales realization which included some sales contract cancellation settlements. Even with the current market conditions, our exceptional sales team was able to book some new business. Our price volumes for the year did not change outside of our active operations. We continue to make progress at the Centurion mine, our key metallurgical coal growth projects. We've had some delays in the delivery dates of some mining equipment from the manufacturer, but expect development coal to occur in the second quarter. As previously announced, we closed on the words well transaction last month. You're currently developing an integrated mine plan, and we'll discuss it more fully in the future. The recruitment of the initial Cinterion mine development workforce is complete, even though labor remains tight in the mining industry in Australia, we continue to expect the first longwall coal in early 2026. Capital expenditures remain in line with previous guidance. We are pleased to announce that for the first time in nearly 12 years. We are mining at our Lee Ranch mine in New Mexico. In 2022, we secured a new long-term contract which extended the life of our New Mexico operation and supported the transition from El Segundo. Back to Lee Ranch. In summary, we have had some challenges this quarter. But as we look out to the full year, our operations and sales would have us well positioned. We completed two longwall moves and Australian coal quality is improving and our production plans give us confidence in reaffirming our full year guidance. I'll now turn it over to Mark to cover the financial details.\nMark Spurbeck\n Thanks, Jim. In the first quarter, we recorded net income attributable to common stockholders of $40 million or $0.29 per diluted share and adjusted EBITDA of $161 million. Included in these results was an S with an estimated $18 million noncash remeasurement charge from the weaker Australian dollar. The Company generated $120 million of operating cash flow and had $61 million of capital expenditures with more than half of it dedicated to insurance during the quarter, we continued to execute on our shareholder return program and repurchased 3.2 million shares or 3% of shares outstanding under the existing $1 billion share repurchase program, we have $570 million of remaining share repurchase authorization. The Company ended the quarter with $856 million of cash fully funded reclamation accounts and the new $320 million revolving credit facility. Turning now to the first quarter segment results. Seaborne Thermal recorded $94 million of adjusted EBITDA. First quarter shipments were 100,000 tons more than anticipated and higher Wilpinjong production offset lower production at Wambo for lower cost. Wilpinjong production was offset by lower realized prices, resulting EBITDA and EBITDA margins of 33% in line with the previous quarter. Seaborne Metallurgical segment generated $48 million of adjusted EBITDA. Average realized pricing was less than anticipated due to mining lower quality coal seam that the CMGV. and PCI. coal prices remain weak relative to premium hard coking coal costs of $139 per ton were at the higher end of guidance due to unplanned equipment and wash plant repair costs at the CMZU.S. thermal mines produced $63 million of adjusted EBITDA in the quarter on lower than expected shipments that Jim previously mentioned. Prb mines shipped 18.7 million tons and generated $16 million of adjusted EBITDA cost came in at 1274 per ton higher than expected due to lower production costs. The other U.S. thermal segment generated adjusted EBITDA of $47 million. We shipped 3.2 million tons about 400,000 tons less than anticipated, but also benefited from contract cancellation settlements, which increased revenue and EBITDA margins above fourth quarter levels. Cost of 45, 25 per ton are in line with guidance as lower maintenance and repair spend offset less volume. Looking ahead to the second quarter, seaborne thermal volumes are expected to increase to 4.1 million tons, including 2.7 million export tons with higher volumes out of the Wambo complex, 400,000 export tons are priced on average at $146 per ton with 1.3 million tons of high ash product and 1 million tons of Newcastle spec product unpriced costs are expected to remain consistent with the prior quarter and $45 to $50 per ton. Seaborne Metallurgical volumes are expected to be 1.9 million tons, 500,000 tons higher than the first quarter as the Metropolitan longwall move is now complete and mine sequencing improves at the CMGV. volumes are expected to achieve 65% to 70% of the premium hard coking coal price based on the projected sales mix and current price relativities with higher production costs are anticipated to improve to $110 to $120 per ton in line with full year guidance. Crb shipments are expected to be 15.5 million tons lower than ratable. As we enter the traditional second quarter shoulder season costs will be temporarily elevated at $12.75 to $13.75 per ton due to lower shipments and resulting higher strip ratio. Other US thermal coal shipments of 3.8 million tons are expected to be higher than the prior quarter as we recently signed new contracts for 1.8 million tons to be delivered this year, we expect costs of $44 to $48 per ton in the quarter. Additionally, in the second quarter, we have the $134 million cash purchase of words well and are expecting tax payments of nearly 120 million in Australia, covering the remaining 2023 liability in the first half of 2020 for estimated payments with an implied stronger second quarter we are reaffirming full year guidance. We expect to generate significant cash flow in the second half of the year and remain committed to returning capital to shareholders. Strategically, we continue to take steps to deliver long-term value. We closed the awards well acquisition in April and continued development at some series. We expect first continuous miner development coal this quarter and are on track to commence longwall operations in the first quarter of 2026, on-time and on-budget. Operator, I'd now like to turn the call over for questions.\nQuestion and Answer Session\nOperator\n Thank you. We will now begin the question and answer session to ask a question. You may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the key to withdraw your question, please press star then two. At this time, we'll pause momentarily, assemble our roster. Our first question comes from Lucas Pipes from B. Riley Securities. Please go ahead.\nLucas Pipes\n Thank you very much, operator. Good morning, everyone. And like Mark, I must mark, I want to I'll start to start with a few questions. On the finance side. You noted the US reclamation bond release of $105 million. And I wondered if you could maybe walk us through the cash flow implications of that release, if any and then more more broadly, there has been some lumpiness around cash flows in Q one. I'd anticipate something similar in Q2 with the Ward's well acquisition closing, could you speak to any other kind of cash flow impact in Q2, be it working capital or otherwise? And then just with that lumpiness, how do you think about staying in the market from a buyback perspective, the do you have the flexibility to be opportunistic or do you kind of pause it here and then resume it in the second half is when you noted cash flow would be stronger again. Thank you very much.\nMark Spurbeck\n Yes, Lucas, thank you for those questions. And I tried to hit on all of them on and really good results with combined reductions in the first quarter credit to credit to our team here for one, getting the reclamation work done, but to also phone and beginning those bond bonds released on average, those bonds are probably collateralized at about 55%. So there was some cash returned. We also moved around from some other bonds in Australia. So there was a cash inflow. So you see a reduction in restricted cash and cash collateral and on the balance sheet. Offsetting that from a cash flow perspective, though, was somewhat using working capital. So net-net, the $120 million of operating cash flow is how I should look at that. You mentioned a little lumpy here in Q1 with with the performance we turned in as expected Q2 will be similar. We have the $134 million cash purchase awards. Well, and I noted in my remarks, the EZ tax payments in Australia of about 120 million. That makes up both the our remaining liability from 2023 as well as our first half of 2024 estimated payments. So a couple of significant cash usages here in the second quarter. But again, going out looking at the second half well positioned, you know, based on guidance in the forward price strip, but you can see some pretty significant cash flow depending on your price deck, but that three to $400 million is an opportunity we have out in front of us from a cash flow perspective on. Maybe lastly, just touching on the program. No, I'll note a couple of things. One, you know, everything we do, including a short-term program is designed for long-term value and durability. And since we restarted the program, we've announced the return of just under $0.5 billion and our $50 million in dividends and about 430 million in share buybacks through the repurchase program, we have essentially created 15% growth in earnings and free cash flow on a per share basis with a share reduction. We have completed the balance sheet initiatives we set out two or three years ago to do which included one very important step and no analysis done. And that is pre-funding 100% of our global reclamation liability. This puts us in a leading position in the industry going forward, taking a big liability off the table and eliminating a big liquidity and capital risk going forward. So we believe that puts us in a great position to continue developing our premium hard coking coal project and Centurion and with our quarterly fixed cash dividend programs. Durability remains through a through periods of lower cash flow, but also very flexible, the increase in periods of above-average free cash flow and direction of our Board. So lastly, I'd note and I think you asked, are we going to be opportunistic or flexible on? Yes, I think our program has been to be flexible. And as we look out to the full year. We see some strong cash flows going forward, and we have the flexibility in our program to look at things on an annual basis and get back in the market on an opportunistic basis when when when our Board deems it appropriate. So a lot of flexibility, a lot of opportunity for us going forward, and we remain committed to returning additional capital to shareholders.\nLucas Pipes\n Mark, really appreciate that. I think you hit on all the other points there. So so I think thank you for that, Jimmy, I wanted to get your perspective on on a couple regulatory things. First, EPA last week unveiled the new Power Plan rule. Could you could you maybe comment on what you think the impact is to your domestic business and how you think from a strategic perspective you could you can mitigate any impact. And then over in Australia, there's I think, a new labor rule coming that in regards to contractor pay, if you could maybe comment on that and what the impact might be in Australia. Would appreciate your thoughts on those two developments. Thank you.\nJames Grech\n Okay. Yes, Lucas, so on the first one with the EPA and the new suite of rules and the Clean Power Plan rules, I do have some comments on that. But I do want to start out and just to recognize the fact that approximately three quarters of the EBITDA generated from our company comes from our seaborne thermal and met segments. So that doesn't mean we're not concerned about these regulations. And again, majority of the EBITDA comes from our seaborne platform. And you know, one of the things you said, what's it going to mean for our domestic business. Well, a lot of these things going into effect if they do go into effect in the later years. So I don't see any near-term impacts. And the question is still out, is there any be any longer-term impacts? So we've stated many times that as a company, we believe in a diverse energy mix and that includes coal and renewables to having a grid reliability and energy security and affordability with this suite of regulations, we do believe that the EPA has overstepped its authority granted to it by Congress, and it's threatening grid reliability at a time of increased energy demand. So what was different? I think this time around from one, the this has happened in past years, it is several things, Lucas, that that has to be taken into account in trying to assess what potential impact that we're going to see from these regulations. One is what's going on now, which is hasn't been happening for many, many years is surging power demand forecast for the next five years, and you've had relatively flat load growth for quite a quite a period in our country. And now with the manufacturing centers of electric vehicles, data centers, a eye centers and so on, there's tremendous tremendous load growth projected. So again, you get what's the impact on new US coal markets while as a result of that load growth projected load growth. If you look in past quarters, over 20 power plants have announced delays in retirement dates. So actually you look at that in the US thermal market from that perspective is actually growing. The second thing that's out there that I think is very, very different from when EPA has done this in the past with these proposed regulation is the national look fly of a concern of grid reliability and not having enough existing even existing baseload generation to support this load growth. And what does that mean is there is a groundswell of opposition or stated concern with these proposed EPA regulations. You've got for New York, PJM, myself, electric utilities, which we haven't heard from in the past, politicians from both sides of the aisle are talking about their concerns with these proposed regulations governing leading national newspapers, The Wall Street Journal, Washington Post New York Times overnight. There's a very good article and Fox news and opinion stating their concerns of this grid reliability said very, very different in the past. This groundswell of opposition and concern over these regulations. And what I think is going to happen is you're going to see a very swift and significant pushback in the U.S. court system overstated over 20 state attorney generals have already announced their intentions to fight the proposed regulations for working with the National Mining Association, America's power to mount the US mining industry support legal challenges and we expect to see court stays on this at some time this year. So the crux of your question is what do we think is going to happen? Nothing in the near term. And I think there's enough opposition in the long term to really put some doubt the impact of these will have on U.S. generation mix, particularly given the fact that powerplant laser being extended because of the load growth. The second question you had was about the new labor rules and Australia contractor, same job same pay. And we've included all that in our guidance already. That really isn't effective until November first. And any impact we see is going to be in there and we don't have as many contractors on our payroll as other other mining companies in Australia. So there is some impact. It's not significant and it's already in our forecast going forward after November first.\nLucas Pipes\n Jim, thank you. Thank you very much for that detailed answer on the EPA side. Very, very helpful. On on the on the on the second part, what roughly what percentage of your Australian workforce is consists of contractors, our labor costs, I guess a few ways to slice it, but Tom gets if it starts November, then we have two out of 12 months impact. So just trying to get a sense for what it could mean for for next year on a full year basis because I don't have that in front me, but we'll get it right back to when we'll get.\nJames Grech\n We'll follow up with you on that when we get to the correct number on.\nLucas Pipes\n That Sounds good. I really appreciate the color. I'll turn it over for now. And in the meantime, best of luck.\nJames Grech\n Thank you and goodbye.\nOperator\n Next question comes from Nathan Martin from Benchmark. Please go ahead.\nNathan Martin\n Thanks, operator. Good morning, everyone. From me to start off with with Centurion guys still targeting development coal there sometime here in the second quarter, it looks like what's your plan and timing, I guess as far as selling or marketing those tons is concerned.\nJames Grech\n The ABO, I'll let Malcolm Robert to comment on that. The subordinated look, we've already started, including contracts for the development called coming out of Cinterion. So during the quarter, a blue chip North Asian customers agreed a two year contract and we look forward to making our first shipment later this year.\nNathan Martin\n Malcolm, are there any limitations there from a transportation standpoint at this point?\nMark Spurbeck\n Absolutely. No transport issues. We fully set up within the GeneAtlas system with contracts and and the like to be able to have to ship that product Okay, perfect.\nNathan Martin\n Great. Appreciate that. And then manage different transportation per second I had, Jim, you made some comments about the Demopolis locked outage and there just to be clear what kind of impact are you still seeing there at Shoal Creek? Clearly, your second quarter net sales guidance is up quarter over quarter, but just a little more color there would be great Yes, I'll comment on the Rocky Mountain and Overton's not going to talk about the sales and the like.\nJames Grech\n We've been saying we expected to be back in service by the end of May. And the current core of engineers came out this morning and actually, so I think it will be May 22nd, that will be back in service. So from a more than a week earlier than planned. So that's some good news that we have for us. Now in regards to your question about the impact on sales, I'll let Malcolm covenant that initial?\nMalcolm Roberts\n Thanks, Jim. We've been railing some product to do. It's up to the port at McAfee. However, what this really means is that for the second half of the year, we're going to be weighted probably two thirds of our annual volume from Shoal Creek to the second half of the year and one-third for the first half as a result, but we really do look forward to that lot coming back end. We're advised today 22nd of May.\nNathan Martin\n Okay, guys. Appreciate it. Appreciate that info as well on and maybe shifting over I know I asked about this last quarter and I think there, Jim, you clearly made some comments in your prepared remarks. Two bucks a PRB shipments below your first quarter target second quarter guidance down 3 million tons plus or minus. Again, we know seasonally that's that's typical during the shoulder season, but would be great to kind of get your thoughts on what gives you confidence to maintain your full year guidance range at this point? I mean, it looks to me like you will need to increase second half shipments by at least 12 million tons just to kind of hit the low end of that range.\nJames Grech\n So it would be great to just get a little bit more thought around that piece in first up the the tonnage levels that we're looking at for the second and in particularly the third and fourth quarter are well within the ranges that we've shipped in the past. So as far as the quantity of coal and our ability to produce it. And I do believe believe the railroads are going to be able to move it as well, which is a key item in the third and fourth quarter. So logistically, operationally, we feel very good about that. The our sales book is strong and the indications we have from our customers is that we know right now we are expecting to have some more normal pull in that third and fourth quarter on those tons. We've already seen an uptick in some nominations for May was a little stronger than we thought it was going to be and we are getting some early indications. We could see that again in view. So it looks like there is recovery starting to occur in the PRB and the indications we're getting from our customers at this time operationally, logistically, we feel again, we feel that that's why we're reaffirming that guidance for the full year.\nNathan Martin\n Okay. Thanks, Jim. And then maybe just one more mark to you don't want to be out. I know Lucas touched on this earlier. Some of the moving pieces on the cash side in the second quarter that are expected on your available free cash flow, I think was actually negative at the end of the first quarter how could this impact your ability to repurchase shares here again here in the second quarter?\nMark Spurbeck\n Yes. No, I you're right. The tables, so the minus four there of Q1, and you a cash purchase awards well, and the cash tax payments are not expecting a robust number for Q2. But again, our program is designed to be flexible, I guess, on an annual basis. We're very happy with our liquidity position, and we see some strong cash flows coming forward here in the second half of the year.\nNathan Martin\n Our team very helpful. Appreciate the time and best of luck.\nOperator\n Thanks. The next question comes from Katja Johnson from BMO Capital Markets. Please go ahead.\nKatja Jancic\n Hi. Thank you for taking my questions. Maybe just staying a bit on the share buybacks, is there any possibility that you could use all of the cash on the balance sheet since it's so strong for buybacks, why?\nMark Spurbeck\n Yes, Jason, it's Mark. As I mentioned, you know, the program is based on an annual look and we have flexibility, as I mentioned, which would make you feel comfortable with our liquidity and in strong cash flows coming in in the second half of the year. So we are designed to be flexible and we haven't announced anything but.com, we have that built in similar to do we deem appropriate to be opportunistic as the market presents.\nKatja Jancic\n Okay. And maybe then on the center and I think for this year for second half, you expect to ship 150,000 tons or that was prior expectation. Is that still does that still hold? And then maybe looking to next year, what potential contribution from Centaur and Catcher?\nMark Spurbeck\n Yes. So this year, we look to we look to ship about 100,000 tons for the current year. And I think production next year on a development basis is probably in the 400,000 ton range. And as Malcolm mentioned, we already have blue-chip Asian customers kind of knocking down our doors, trying to contract some of that. So it really set up strong.\nKatja Jancic\n Okay. Thank you.\nOperator\n Again, a discussion here and if you have a question, please press star then one. Our next question is a follow-up from Lucas Pipes from B. Riley Securities. Please go ahead.\nLucas Pipes\n Thank you very much for taking my follow-up question and I'll start with a quick one at the high ash product, could you remind us what pricing has been quarter to date for that API. five? And then where does Wilpinjong typically price as a percentage against that, that index? Thank you.\nMalcolm Roberts\n In short span from here, we will go into one of 5% to 20% discount against the APR five index, which is the China Index, which is a 55 hundred k. Cal, 22% ash product we supply a product slightly higher than that. So well, that represents a discount we go on to.\nLucas Pipes\n All right. That's that's that's helpful, Tom. And I'm sure Creek in QQ. one, the MK Data was very helpful. Harvest was very, very strong on. And so I wondered if you could maybe comment it on on kind of the operational outlook from from here. I assume there's maybe a little bit of a normalization, but would be helpful to hear how you think about operations at Shoal Creek for the remainder of the year.\nJames Grech\n Look I think the FMC data had about 600,000 tonnes in Q1, which again is a very, very strong quarter for the mine. Very, very happy with what the team has done down there and show that new fit for purpose longwall that we had down there. It's really making a difference, but we do have a longwall move later in the year we have miners' vacation and so on for us to contend with leading, and we didn't have all of those things occurring in the first quarter. So it'll allow us to keep that pace up. This would be very challenging and later in the year with all the things that we have, I just don't see it staying at that pace in the following quarter with the longwall moves and the miners' vacation that we have ahead of us.\nLucas Pipes\n I appreciate the color. Thank you very much and again, best of best of luck.\nJames Grech\n Thank you.\nOperator\n Thank you. With this, there are no more questions in the queue. This concludes our question and answer session. I would like to turn the conference back over to Jim. Greg for any closing remarks.\nJames Grech\n So thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety and for continuing to execute on our various initiatives I'd also like to thank our investors, customers and vendors for your continued support, and operator concludes our call. Thank you.\nOperator\n Conference has now concluded, and thank you for attending today's presentation. 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