On 15 February 2019, Whitehaven Coal Limited (ASX: WHC) announced its half-yearly FY2019 results where its managed ROM coal production of 11.0 Mn tonne (Mt) was in line with the previous corresponding period and coal sales of 10.3 Mn tonne, were 14% below the previous corresponding period. Its strong coal production in the December quarter from both Maules Creek and Narrabri led to a better finish in the first half of the year 2019. Maules Creek produced a record 6.2 Mn tonne ROM coal in the first half of the year and is on the way to achieve its approved run rate of 13 Mn tonne p.a. in the second half of the year 2019. The total sales comprised 18% of metallurgical coal sales during the first half of the year with pricing relativity between metallurgical and thermal coal lately starting to incentivize more sales of metallurgical coal towards the end of the period. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
It reported an increase of 19% in its net profit after tax to $305.8 Mn in H1 FY19 as compared to $256.2 Mn in H1 FY18. It has reported gross sales revenue up by 11% to $1270.1 Mn in H1 FY19 as compared to $1,146.4 Mn in H1 FY18, credit to increase in realized prices to an average of A$155/tonne in H1 FY2019 up from A$124/tonne in H1 FY2018. Its underlying EBITDA before significant items was reported up by 12% to $550.8 Mn. Its cash generated from operating activities was reported up by 5% to $463.8 Mn. Its net debt reduced to $244.2 Mn (gearing at 7%) as reported on December 31, 2018. The Board has decided to pay an unfranked dividend of 20 cents per share to its shareholders comprising an interim dividend of 15 cents per share and a special dividend of 5 cents per share which will amount total dividend of $267.5 Mn.
Its unit costs increased to $69/tonne in the period due to the predominantly rise in logistics and diesel prices and increased coal washing. Further due to the alignment process with new product strategy at Maules Creek and lower production from the low-cost mines.
WHC has made significant contributions in its economic and social contributions where it paid $108.7 Mn to the New South Wales govt. in mining royalties, committed $120,000 over 3 years to the establishment of the Clontarf Academy at the Narrabri High School, donated $157k to local community groups including $60k for drought relief in the local region and moved all local suppliers to industry-leading, 21-day payment terms.
On safety performance, it recorded a TRIFR of 7.57 in December 2018 from 6.91 at the end of June 2018, showing better safety performance across all segments.
Whitehaven’s guidance for the financial year 2019 for saleable coal production is updated to be in the range of 21.5 Mn tonne to 22.5 Mn tonne. The unit cost guidance for the full year has increased to $67/tonne (excluding royalties) from previous guidance of $64/tonne due to lower production, associated to underutilized logistics and demurrage impacts, as well as higher diesel prices in the September 2018 quarter.
The outlook for Coal demand: As per International Energy Agency (IEA), the world energy demand will increase by about 27% from 2017 to 2040 and in particular world energy demand met by coal is likely to increase by circa 2% between 2017 and 2040.
About the company:
Whitehaven Coal is one of Australia’s leading coal producer with operations in 6 mines across five open cut mines at Tarrawonga, Rocglen, Maules Creek, Werris Creek and Sunnyside and one underground mine at Narrabri. It also exports thermal and metallurgical coal from these sites to markets in North and South Asia.
Whitehaven coal’ share traded at A$4.430 (down -6.681%, AEST 04:00 PM, February 15, 2019) with the market capitalization of A$4.91 bn. Its 52 weeks high has been noted at A$5.799 and 52 weeks low at A$3.967. Its absolute return for the past 3 months, 1 year, and 5 years are 1.7%, 11.7%, and 224.33% respectively.
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