Before hedging, Australian mining operations’ earnings increased $40.9 million to $61.9 million. Australian Mining adjusted EBITDA declined $26.3 million to a loss of $24.5 million in the first quarter, and includes $67.2 million in higher hedging losses versus the prior year.

First quarter Australian results also include about $25 million related to temporary overburden sequencing issues at the Coppabella mine in Queensland, along with mechanical related delays at the nearby North Goonyella mine, both of which have been resolved.

Excluding the impact of hedging, all Australian mines would have generated positive Adjusted EBITDA in the first quarter except for the contractor-operated Burton mine in Queensland.

Australian Mining revenues declined $63.6 million to $548.2 million, reflecting a 16% decline in revenues per ton, partly offset by a 7% increase in shipments.

Australian volumes totalled 8.8 million tonnes, including 3.8Mt of metallurgical coal at an average realised price of $89.14/t and 3.0Mt of export thermal coal at $57.64/t, with the remaining 2.0Mt delivered under domestic thermal contracts.

Australian costs per tonne declined 12%, reflecting sustainable cost reductions, lower fuel prices and the repeal of the carbon tax.

Peabody Energy president and CEO-Elect Glenn Kellow said: “In the face of market headwinds, Peabody's first quarter performance demonstrates the underlying strength of our business as ongoing cost improvements largely overcame lower coal prices and the impact of hedging.

“While our team has made considerable strides in driving down costs, we know we have further work to do, and we are implementing a wide range of initiatives to provide sustainable results and generate shareholder value.”

Turning to the whole group, first quarter revenues of $1.54 billion lead to Adjusted EBITDA of $166 million.

US Mining Adjusted EBITDA increased $1.5 million over the prior year to $254.1 million as cost reduction efforts offset the impact of lower Midwest realisations.

US Mining revenues of $965.0 million declined 2% from the prior year due to a greater mix of Southern Powder River Basin sales and lower realized pricing in the Midwest.

US costs per tonne declined 3% as a result of a greater mix of Western shipments, continued cost containment activities and the net benefit from lower fuel prices.

The company is progressing a strategic review of its portfolio of Australian tenements and is continuing to explore interest for US assets. Peabody has more than 7.5Bt of coal reserves, including about 3Bt not assigned to active mining operations, along with 500,000 acres of surface lands and other assets that are under evaluation.

The company is also evaluating options at its highest cost operation, the Burton mine, where the current contract-miner agreement expires in mid-2016.

“The Peabody team has clearly demonstrated its ability to improve performance in the face of extended market weakness,” Kellow said.

“With speed, focus and purpose, we are taking additional substantial measures with an emphasis on improving our platform across four primary areas of the business. These measures, combined with our portfolio exposure to key markets, provide Peabody multiple avenues for success now and in the future.”