Peabody Energy reported full-year 2014 revenues of $US6.79 billion, leading to adjusted EBITDA of $814.0 million. This compares with $7.01 billion in revenues in the prior year primarily due to sharply lower realised pricing in Australia.
Adjusted EBITDA declined $233.2 million from the prior year, as the impact of more than $550 million in lower pricing was mitigated by about $275 million in lower costs from aggressive actions to reduce expenses and increase productivity.
The company is continuing its comprehensive repositioning initiative to include office closures, workforce reductions and implementation of shared services to consolidate activities and lower annual overhead costs, it said.
“2014 was a turbulent year for the coal markets as slowing near-term demand growth and strong seaborne supplies resulted in continued coal price declines,” Peabody Energy president and CEO-elect Glenn Kellow said.
“We would anticipate seeing catalysts for market improvement including stable seaborne metallurgical supply, the addition of new global coal-fueled generation and coal import growth in India and southeast Asia.
“In the US, we expect Southern Powder River Basin consumption to rise in 2015 despite lower expected natural gas prices, as rail performance improves and utility coal conservation measures are eliminated.”
In 2014 Australian costs per ton of $68.05 reached the lowest annual level since 2010, driven by structural cost improvements from owner-operator conversions, two new longwall systems and reduced production at the contractor operated Burton Mine, the company's highest unit-cost operation.
Australian costs per ton are expected to benefit from further cost containment efforts that offset normal inflation pressures, the company said.
In 2015 it would build upon cost reductions and Australia's competitive advantage with additional cost improvements at the operational and corporate levels, and maximise the benefits from declining oil costs and lower Australian dollar exchange rates.
Australian revenues of $2.67 billion reflected a 16% decline in revenues per tonne, partly offset by a 9% rise in shipments. Australian volumes increased to a record 38.2Mt, including 17.6Mt of metallurgical coal at $93.61/t and 13.0Mt of export thermal coal at $68.02/t, with the remainder delivered under domestic thermal contracts.
US mining revenues of $4.02 billion were in line with the prior year, as an increase in Western shipments offset a decline in average realized pricing, primarily related to contract reopeners in the Midwest.
Peabody increased Southern Powder River Basin volumes to the highest annual level since 2011, and the flagship North Antelope Rochelle mine achieved record production levels, even as rail issues constrained industry shipments.
Peabody projects 2015 metallurgical coal import demand increases will outpace supply growth for the first time since 2011. Seaborne metallurgical coal supply is expected to be flat in 2015 as modest Australian growth is offset by North American cutbacks.
About 25Mt of seaborne metallurgical production cutbacks have been announced over the last 12 months, with an estimated 15Mt yet to be realised by mid-2015.
