The company could only scrape an adjusted EBITDA of $216.3 million.

Australian revenues decreased 4% as higher volumes partly offset a 13% reduction in revenues per tonne.

Australian sales totalled 10.0 million tonnes, including 4.6Mt of metallurgical coal and 3.4Mt of seaborne thermal coal.

But Peabody chairman and CEO Gregory Boyce said the company is seeing some favourable industry indicators.

“India is transitioning to become the fastest-growing coal importer,” he said.

“More than 20 million of the approximately 30Mt of announced global metallurgical production cutbacks are yet to be realised. In the US, while a mild summer and rail performance impacted volumes and market activity, Southern Powder River Basin customer stockpiles ended September at a nine-year low, and we anticipate improving logistics and rising volumes in the Southern Powder River and Illinois basins as we look toward the new year.”

Peabody continues to leverage operational improvements and is advancing further cost reduction efforts to maximise cash flows, including additional spending reviews across the organisation, according to the company.

Operational initiatives are focused on improving yields, increasing automation and optimising production of the longwall top coal caving system at the North Goonyella Mine, where production has increased more than 55% over the second quarter.

The company is also leveraging the benefits of Queensland’s Moorvale mine owner-operator transition completed in the third quarter.

More than 95% of Australian production is now under the owner-operator model, which continues to provide additional cost savings at converted mines.

Based on current global economic growth forecasts, Peabody expects annual global coal demand to rise 550Mt by 2016. Over this same period, about 250 gigawatts of new coal-fueled generation is expected to be built.

Seaborne metallurgical coal demand is projected to increase over time, led by ongoing urbanisation and industrialisation in China and India.

With solid operating performance to date, the company now targets total 2014 Australian sales of 36 to 38Mt, including 16 to 17Mt of metallurgical coal and 12 to 13Mt of export thermal coal.