The company fears things may get even worse for the remainder of the year with the effect of higher fuel charges and an unfavourable exchange rate kicking in.
Wilpinjong reported it sold thermal coal to its domestic customers for at an average price of US$22 per ton - exactly the same price as its costs of production per ton.
"Wilpinjong costs of $22 per ton were impacted by unfavorable exchange rates and higher fuel and royalty costs compared to the prior year," the company said in its June quarterly report.
"Operating cash flow was also impacted by timing of shipments, higher accounts receivable and higher inventory levels."
In its outlook for its Seaborne thermal operations, which include Wilpinjong and the Wambo joint venture in NSW, Peabody says costs per ton are expected to be $33.75 due to product mix, higher expected royalties, exchange rates and fuel prices.
"Higher seaborne thermal volumes [are expected] in the second half as Wilpinjong and the Wambo JV complete development projects and reach projected production run rates," Peabody said.
"Second half Wilpinjong revenue and costs per ton are anticipated to be higher than first half 2021 as estimated export shipments [with higher realised pricing and higher preparation, transportation and royalty costs as compared to domestic shipments] are anticipated to be a higher proportion of total volumes.
"Peabody anticipates 3.7 million tons of export shipments and 3.6 million tons of domestic shipments for the remainder of the year."
The first unit at Liddell will close in April 2022. The remaining three units will close in April 2023 after supporting system reliability throughout the 2022-23 summer months.
Much of the coal is supplied to Liddell by overland conveyors from nearby mines it shares with the nearby Bayswater power station. Those mines will continue to supply Bayswater until it is retired.
Wilpinjong contributed approximately $52 million of Peabody's adjusted earnings before interest, depreciation, and amortisation in the June quarter, mainly because of the contribution of its thermal coal exports.
In the second quarter, Wilpinjong shipped 3.3Mt at an average realised price of $38/t, which included 1.2Mt of export sales at an average realized price of $63/t.
Turning to met coal, the seaborne met segment shipped 1.4Mt at an average realised price of $85.48/t in the second quarter, with Metropolitan restarting longwall production late in the quarter.
Total segment costs of $104.24/t decreased 14% compared to the prior year as productivity improvements and increased sales volumes at the Coppabella and Moorvale Joint Venture offset the impacts of unfavorable exchange rates, ramp up costs at Metropolitan and Shoal Creek idle costs.
Seaborne met coal costs, excluding Shoal Creek, were approximately $95/t, an improvement on the $110/t in the prior year primarily due to fleet optimisation and mine sequencing at the CMJV, which lowered costs by more than 20% to $84/t.
The segment reported an adjusted EBITDA loss of $26.4 million.
CMJV is expected to continue to have cost and productivity improvements with full year sales volumes at the high end of guidance of 3.5-4Mt.
