Australian revenue of $US611.8 million ($A659.7 million) was impacted by a 17% decline in revenue per ton, while Australian sales totalled 8.2Mt, including 3.2Mt of metallurgical coal and 3.1Mt of seaborne thermal coal.
Loss from the company’s entire continuing operations totalled $44.3 million compared with $10.3 million in the prior year.
“With the change in the metallurgical coal environment in the last quarter, we’re having some pretty serious looks at a couple of operations,” Boyce reportedly told investors.
“These operations are getting significant scrutiny because at this lower price horizon, they’re much more challenged.”
The company would also be implementing additional cost reductions and capital efficiency programs and further evaluating the portfolio in recognition of the current market environment, it said.
“This includes reviewing procurement spending, executing continuous improvement initiatives, assessing mine plans, and maximizing the benefits of the recent owner-operator conversions and organizational changes,” it said.
“Peabody is also targeting additional non-core asset sales beyond Mineral Development License 162, a standalone coal deposit in Queensland, Australia, which sold for $A70 million in the first quarter.”
Peabody said it continues to maximize cash flows through capital discipline, significant cost reduction activities and targeted non-core asset sales. First quarter capital investments were the lowest in 10 years, and 2014 capital targets have been reduced to $250 to $295 million.
The company is focused on initiatives to achieve full production targets from the longwall top coal caving system at the North Goonyella Mine in Queensland.
“Equipment performance is improving, with output in early April running approximately 75% above first quarter levels. Production rates are expected to reach normalized levels by the end of the second quarter,” Peabody said.
It will also be converting the Moorvale Mine in Queensland to owner-operator status in the second half of 2014 and advancing the reserve development at the Gateway North Mine in Illinois to replace production from the existing operation in 2015.
It will be replacing the conventional longwall at the Metropolitan Mine in New South Wales to increase productivity with installation is on track to be completed in the second quarter.
The company is targeting 2014 Australian sales of 35 to 37Mt, including 16 to 17Mt of metallurgical coal and 11 to 12Mt of export thermal coal.
