Australian costs per ton improved 28% to $48.11, a record low for this platform, which includes the benefit of lower currency and fuel rates, productivity improvements, workforce reductions and operational changes implemented in the second quarter.
Australian volumes totalled 9.3 million tons, including 4.0Mt of metallurgical coal at an average realized price of $68.53 and 3.3Mt of export thermal coal at $52.97/t, with the remaining 2.0Mt delivered under domestic thermal contracts.
Peabody president and CEO Glenn Kellow said: “Peabody's third quarter results reflect a solid operational performance across the portfolio that continues to limit the pricing impacts from unprecedented market conditions.
“Our mining platform is operating well, and we are balancing our dual financial objectives of optimizing liquidity in response to the prolonged industry downturn whilst keeping a strategic eye on deleveraging.”
But the stock market wasn't impressed with the result and Peabody shares plunged more than 20% overnight on the NYSE.
Overall third quarter revenues for Peabody totalled $1.42 billion compared with $1.72 billion in the prior year due to a 7% decline in volume and lower realized pricing.
Third quarter adjusted EBITDA of $129.0 million reflects approximately $200 million in lower operating and administrative costs that mitigated the impact of nearly $120 million in lower pricing and $123.7 million in hedging losses.
“Peabody benefits from an unmatched global asset base, strong underlying operational performance and our mines are strategically positioned to access the best markets,” Kellow said. “The company continues to navigate the current environment with a fresh perspective and an intense focus on the operational, organizational, portfolio and financial areas of our business.”
After working with customers to defer shipments into 2016, the company reduced 2015 US sales volumes by 5Mt. 2015 Australian costs per ton are now targeted to be nearly 25% below 2014 levels as a result of lower currency, fuel rates, productivity improvements and operational changes.
Peabody also expects 2015 capital spending and selling and administrative expense to be approximately 25% lower than 2014 levels.
