While this was only partially offset by a slightly higher average realised price per tonne sold, the company’s adjusted EBITDA for the quarter was up on the previous corresponding period at $44.3 million.
Cost per tonne was $US10.02 for the first quarter of 2015 with operating costs being reduced primarily due to a 40% drop in diesel prices.
“We have successfully executed our plan to reduce capacity at Cordero Rojo mine from 38 million tonnes to 28Mt,” the company said.
“During the first quarter, 8400Btu demand softened further and two of our customers indicated they did not plan to take their contracted 2015 tonnage. We collected $3.3 million under a letter of credit for one of these customers who defaulted on contracts for 2.9Mt as part of its bankruptcy proceeding.
“Another customer will not take one million tonnes under force-majeure provisions in its contract due to a plant failure. As a result, we have lowered our expected 2015 production at the Cordero Rojo mine from 28Mt to 24Mt this year, which is reflected in our updated guidance range. We are working to mitigate the impact of this reduction on our workforce and financial results.”
Forecast capital expenditures for the full year have been reduced to between $45 million and $55 million as a land transaction has been delayed to 2017 and equipment budgets have been refined.
The range includes the dragline move from our Cordero Rojo Mine to Cloud Peak’s Antelope mine, which is expected to cost approximately $20 million in 2015. The final West Antelope II LBA instalment payment of $69 million will be made this year.
Cloud Peak President and CEO Colin Marshall said: “I am very pleased with our financial and operational performance during the quarter.
“The mines operated well, and we were able to decrease costs and control capital expenditures as production declined. Given the mild winter, improved rail performance, and low natural gas prices, we believe domestic coal prices will remain subdued this year.
“International prices continue to be negatively impacted by oversupply and also by uncertainty over Chinese 2015 thermal coal imports. Cloud Peak Energy is actively managing its exposure to these tough markets and has a strong balance sheet and good operations that we believe will help carry us through this cycle.”
Group adjusted EBIDTDA for the first quarter came in at $39.4 million while net income was a loss of $4.7 million compared to a loss of $15.6 million in the previous corresponding quarter.
