Peabody to double Australian coal exports over next 5 years
Friday, 23 Oct 2009
Dow Jones reported that Peabody Energy's third quarter profit slumped 71% on sharply lower margins in Pacific markets, but the results topped expectations as the coal producer cut costs at Western US mines and shipped record amounts of Australian coal used in steel production.
Peabody also said that it plans to double its exports of Australian metallurgical and thermal coal over the next 5 years to serve its fast growing Asian markets. As for the US market, executives pointed to some signs of improvement but continue to face record thermal coal stockpiles at power plants.
Mr Richard Navarre president & CMO of Peabody said that "The best we can say about the past 12 months is they are over."
Peabody and its peers have been hurt by lower sales volume and weaker pricing. The Australian operations were hardest hit by prices down from a booming market a year ago as gross margin fell more than 70% to USD 16.56 a tonne.
The company raised its 2009 production targets to about 190 million tonnes in the US and 21 million to 23 million tonnes in Australia, with estimated total sales from 235 million to 245 million tonnes. In July, the company had forecast 185 million to 190 million tonnes in the US and 20 million to 23 million tonnes in Australia, with estimated total sales of 225 million to 245 million tonnes. Peabody also projected EBITDA of USD 1.2 billion to USD 1.3 billion, up from its July view of USD 1 billion to USD 1.2 billion.
