Peabody reported a second-quarter net loss of $1.3 million, compared with net profit of $24.5 million in the same quarter in 2002.
Total income was US$31 million before US$32.3 million in charges. Excluding the charges, Peabody achieved a good result with 27% increase in earnings.
"I'm pleased to report that Peabody's mining, sales and resource management activities all made strong contributions and overcame a number of challenges," chairman and CEO Irl Engelhardt said.
"We are targeting increases in second half production and EBITDA due to higher sales commitments."
Revenues rose 6% in the second quarter to US$693.2 million and increased 3 percent to US$1,374.5 million for the first half. Improvements were driven by higher prices and volumes in the Powder River Basin and increased brokerage sales, which overcame lower pricing in West Virginia on agreements reached during the softer market conditions in 2002.
EBITDA totalled $96.4 million for the second quarter and $193.5 million for the first half. EBITDA was impacted by customer repairs, mild weather and heavy rains that reduced shipments, as well as adverse currency fluctuations and pricing in Australia.
Peabody said it operated below optimal levels at many locations during most of the first half and completed high levels of maintenance during the second quarter. Cost control initiatives, the positive effects of pricing and volumes in the Powder River Basin and strong resource management contributions offset a number of these challenges.
Capital expenditures was up to $33 million for the second quarter after the company continued to ramp-up its new 4.5 million ton-per-year Highland Mine in Western Kentucky. New state-of-the-art longwall equipment was installed and a move was completed to new reserves at the 5 million ton-per-year Federal Mine in Northern West Virginia.
The company now targets 2003 capital expenditures of approximately $200 million.
In second quarter investment moves, Peabody purchased the remaining 18.3 percent of Black Beauty Coal Company, the largest Midwestern coal supplier.
Last week, the company acquired a minority interest in a small, synergistic Midwestern coal operation.
Peabody also recently filed a siting permit application for the Thoroughbred Energy Campus, its planned 1,500 megawatt coal generating project in Western Kentucky.
Looking ahead, third quarter EBITDA is targeted in the range of $95 to $105 million, based on improved shipments as coal plants run at higher capacity levels.
