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T1243

T1243
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  • Dig Up 8.9% Yields With Berau Coal's Short 44-Month Yankee Bonds [View article]
    It's a $ per BTU game. Always a market for crap if the price is cheap enough.
    Jul 31 05:03 AM | Likes Like |Link to Comment
  • Dig Up 8.9% Yields With Berau Coal's Short 44-Month Yankee Bonds [View article]
    I am a coal industry analysts focusing on Asia.

    I feel I need to warn people about Indonesia. It has a set of risks like no other. The cultural and ethical divide needs to be understood before anyone does business there. All business dealings are done on the basis of what one can get away with. There is virtually no legal structure for foreigners, and foreigners are a target for being ripped off on principle.

    I am happy to provide some advise if anyone wants to do business in Indonesia.
    Jul 30 03:02 PM | Likes Like |Link to Comment
  • Peabody Energy Surprises With Lower Costs And Better Guidance [View article]
    Thanks Moses,

    Once you come to the view point that BTU is not going out the back door, then you must appreciate that there is room for the share price to rise with a little encouragement.

    So what has changed to show encouragement you ask. Good question Moses!

    1. Australian Govt. has finally realized they can't kill the goose that laid the golden egg. Example, Carbon tax will go, in current form at least.

    2. Analysts are trending the AUD exchange rate down. So economics for BTU are more likely to get better than worse.

    3. Focus in US politics is starting to move away from regulatory issues to the 2016 election. Being out of the lime light will be good for coal.
    Jul 29 02:37 PM | 1 Like Like |Link to Comment
  • Peabody Energy Surprises With Lower Costs And Better Guidance [View article]
    Chuck,

    I wouldn't rule out BTU being fare value. When they borrowed $5B to buy Macarthur, they changed the company forever. If you look further back in the charts than 12 months, you are crazy.

    I understand that the whole Australian business unit currently runs cash neutral at around 93 cents exchange rate. So they will ride out this storm. We need to see the coal price rise and/or the AUD fall. Both will make all the difference for end of year reporting. I am bullish that one of those things will happen and we could well see BTU pushing $20 by the end of the year.

    T.
    Jul 25 12:19 PM | 1 Like Like |Link to Comment
  • Peabody Energy Surprises With Lower Costs And Better Guidance [View article]
    Moses,

    Hang...I am an analyst and I have always given you the truth.

    Anyway back to BTU. Proclaiming the profit was due to cost cutting...now that is ridiculous. Nearly all came from a 10% exchange rate move. Not spending money one doesn't have is hardly a saving.

    T.
    Jul 25 05:14 AM | 1 Like Like |Link to Comment
  • New Australian Prime Minister Kevin Rudd plans to discard the country's carbon tax and introduce a less costly floating price emissions-trading system by July 1, 2014, a year earlier than planned. The scrapping of the tax, which was a flagship policy of ousted PM Julia Gillard, is expected to lower government revenues by several billion dollars, so it will have to cut costs to compensate. Companies that could be affected include Peabody Energy (BTU), BHP (BHP), Rio Tinto (RIO) and Glencore (GLCNF.PK). [View news story]
    Vorgriff, Thank you for the prompt.

    The original fixed Carbon Tax was what the Labour party needed to get the Greens party support to form Government in 2010. A new election should be called any day now. Switching to a floating carbon price takes some wind out of the Oppositions sails. A complete political play.

    But back to what it means for the mining companies like Peabody? It should bring the direct cost from $24 down to ~$10 per tonne of CO2. While there has been some positive articles, it has not moved the share price of the likes of RIO, BHP significantly.

    Profitability for Australian coal mining operations are still at the mercy of revenues. Profitability still dominated by coal price and the exchange rate. Currently 0.91 cents, down from over parity, but still high historically. Once we see the AUD look like staying in the ~0.80s, we will see companies like Peabody start generating free cash flow again. But until then, don't look for any dividend contributions from Australian operations. I am confident it will happen, and BTU will reap benefits from their MCC acquisition. But the floor is awash with blood.

    I understand Peabody are announcing another round of retrenchments on the 23rd July.
    Jul 15 12:52 PM | 1 Like Like |Link to Comment
  • Peabody Energy: Commodity Contrarian Investing 101 [View article]
    Albeit there is no serious alternative to steel. Met coal has to be the speculative play in town.
    Jul 4 06:08 AM | Likes Like |Link to Comment
  • Peabody Energy: Commodity Contrarian Investing 101 [View article]
    Ken,

    Costs in AUD terms are stable and if anything falling. So when you say Australian costs will only continue to go up, I'm guessing you mean the AUD will go higher?
    Jul 4 02:28 AM | 2 Likes Like |Link to Comment
  • Peabody Energy: Commodity Contrarian Investing 101 [View article]
    BTU basically has until 2016 to get its self together before debt reduction will be enforced. Until then they can survive on cash flow. They will need to spend some money however to keep their tenements. That will hurt but should be doable.
    Jul 3 07:58 PM | 3 Likes Like |Link to Comment
  • Peabody Energy: Commodity Contrarian Investing 101 [View article]
    Tim,

    A good summary of BTU. While the acquisition of MCC looks ill timed, expensive and disruptive, it was actually essential for BTU to stay in Australia. The fact that they got screwed by Aclor Metal into fronting the full $5B was unfortunate.

    Peabody Australia prior to the MCC acquisition just did not have the reserves to stay in Australia beyond about 2016. This was largely because they did not have the pipeline of tenements to support 30Mtpa. The MCC acquisition gave them not so much reserves, but vast exploration rights.

    Peabody had come and gone from Australia a few times. Greg getting Eric Ford on board was the signal that he was serious this time about generating a sustainable business in Australia. I am confident it will pay off, but much pain and dented reputations will be suffered on the way.

    I am thinking that once they announce the financials after June 30 close, that should be the worst over with. The third and forth quarters will start seeing improvements from the lower AUD.
    Jul 3 02:07 PM | 4 Likes Like |Link to Comment
  • Light At The End Of The Tunnel For Peabody Energy [View article]
    The light at the end of the tunnel is a train wreck.
    Jul 2 04:40 AM | Likes Like |Link to Comment
  • Peabody Energy Is Awaiting The Coal Market Rebound [View article]
    NK,

    You have just regurgitated a Bloomberg article. Get over yourself and stop being a dick.

    T.
    Jun 27 04:45 AM | 1 Like Like |Link to Comment
  • Peabody Energy Is Awaiting The Coal Market Rebound [View article]
    Moses,

    The Aussie economy is like a teenager finally waking up, just to find he has a hang over and in a heap of trouble. We rode through the GFC reasonably unscathed due to commodity prices staying up. All that did is make the AUD look like a safe haven while EUR, YEN, USD play currency wars. The AUD has been uncharacteristically high now and for an extended time, In AUD terms, this means the revenue decreases as compared to costs. Many thermal mines are operating with negative cash flow, praying the AUD will fall. (Peabody has a few of these). Iron ore, Copper, Cattle and Wheat exports suffer the same situation. Tourism is also down as Australia becomes very expensive.

    So the Government is finally realising that their tax revenue is going to be order of magnitude less than during the GFC. An election coming up in September just adds to the momentum about miss management. As the current Government took credit for surviving the GFC well, they know need to take credit for their poor revenue forecasting.

    So what does it mean for BTU shareholders? Well... at parity (AUD/USD) there will be zero profit coming out of the Australian business unit. At 80c (ForEx) they will get a margin to match their US operations. But the nice thing about ForEx is that it can move quickly. The currency will fall at some point, and the Australian operations will become hugely profitable again. Then listen to Greg (If he is still there) talk about how well they have done with cost cutting.
    Jun 24 06:22 PM | 1 Like Like |Link to Comment
  • Peabody Energy Is Awaiting The Coal Market Rebound [View article]
    Thanks Moses,

    In Chucks defense, WH decisions do to varying extents effect the globe. The WH decision coming up on the Keystone pipeline extension is a good example. If the pipeline gets approval, WH credibility will be lost in the eyes of the environmentalists. If the pipeline does not get approved, the WH can say goodbye the energy independence concept.

    It will be entertaining to see how that plays out. You guys are lucky... you have front seat tickets to the show :)
    Jun 24 11:31 AM | Likes Like |Link to Comment
  • Peabody Energy Is Awaiting The Coal Market Rebound [View article]
    Chuckles,

    Actually you are right. I have absolutely no interest in your WH. As a coal industry analyst living in Australia and focusing on Asia, the WH has very little relevance other than entertainment value. For at least 50% of the Peabody business this is much the same. Hence the conversation on exchange rates. Peabody is not the all American it once was.

    T.
    Jun 24 10:55 AM | Likes Like |Link to Comment
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