Energy Players- NHC, WHC, CVN, YAL, VEA.

When it comes to participation in development of the economy, the energy sector of Australia plays a crucial role. Australia is a leading exporter of energy and has extensive energy resources from both renewable and non-renewable sources. However, the growth of this sector is primarily having dependency on exports. At the time of writing on 13th September 2019, the S&P/ASX 200 Energy Sector was placed at 10,583.48, with a fall of 0.46% over the previous close.

New Hope Corporation Limited

New Hope Corporation Limited (ASX: NHC) is mainly involved in the extraction and processing of coal in QLD and NSW. The company also has its footprints in marketing and logistics.

The Judgement of Court of Appeal

The company through a release dated 10th September 2019 announced that the Court of Appeal has passed a judgement, which is related to New Acland Stage 3 project

  • Queensland Court of Appeal passed judgement against Oakey Coal Action Alliance Inc
  • It was also mentioned in the release that the Court of Appeal further made a judgement, which is favourable to the company’s subsidiary, New Acland Coal Pty Ltd on the matter of groundwater and that the original Land Court recommendation was infected by apprehension of bias.
  • It stated that before assessing the next steps for the New Acland Stage 3 project, it would wait for Court to make its final orders

Financial Performance

  • For the 1H FY19, the company reported revenue amounting to $616.7 million, reflecting a rise of 21% in comparison to prior corresponding period.
  • The profit before tax and non-regular items amounted to $228.9 million with a rise of 33% on the prior corresponding period
  • It posted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) before non-regular items, of $285.1 million, which represents a rise of 31% on the prior corresponding period.
  • The net profit after tax before non-regular items stood at $159.8 million with a rise of 33% on the prior corresponding period.

On the stock’s performance front, the stock of New Hope Corporation Limited was last traded at a price of A$2.500 per share on 13th September 2019. It provided a negative return of 39.43% in the period of six months. On a YTD basis as well, the stock witnessed a decline of 22.49%.

Whitehaven Coal Limited

Whitehaven Coal Limited (ASX: WHC) is engaged in the development and operation of coal mines in New South Wales (NSW). The company has recently announced that it would conduct its 2019 Annual General Meeting on 17th October 2019, wherein the following items of business will be transacted:

  • To receive and consider the company’s financial reports
  • To consider remuneration report
  • To grant long-term incentive to Managing Director under the Equity Incentive Plan
  • Election of directors

As per the release dated 22nd August 2019, the company updated the market that it has entered into a binding agreement in order to make the acquisition of EDF Trading Australia Pty Limited, which owns a 7.5% interest in the Narrabri Mine, which is operated by Whitehaven.  After the wrap up of acquisition, the company would own 77.5% of the mine. This is conditional on other partners not exercising their rights.

The company will be paying a total consideration amounting to US$72 million for the acquisition with US$17 million payable on completion and the remaining US$55 million payable over five years.

Financial Performance

  • For the financial year ended 30th June 2019, the company posted record net profit after tax before significant items amounting to $564.9 million.
  • It reported sales revenue amounting to $2,487.9 million, reflecting a rise of 10% and underlying EBITDA of $1,041.7 million with a rise of 2.9% over FY 2018.
  • The Board of the company has proposed a dividend amounting to 30 cents per share to shareholders, which is comprised of an ordinary dividend of 13 cents per share, franked to 50% and a special dividend of 17 cents per share, unfranked

On the stock’s performance front, the stock of Whitehaven Coal Limited was last traded at a price of A$3.330 per share on 13th September 2019. It provided negative return of 19.66% in the period of six months. On YTD basis as well, the stock witnessed a decline of 15.53%.

Carnarvon Petroleum Limited

Carnarvon Petroleum Limited (ASX: CVN) is involved in exploration, development and production of oil and gas.

Quarterly Rebalance of the S&P/ASX Indices

  • As per the release dated 6th September 2019, the S&P Dow Jones Indices has published a release, wherein, changes in the S&P/ASX indices were mentioned.
  • It was mentioned in the release that Carnarvon Petroleum Limited would be added to S&P/ASX All Australian 200 index, which will be effective at the market open on 23rd September 2019

Results of Dorado-3 wireline

  • The company recently through a release announced that wireline logging of the Dorado-3 well has successfully confirmed hydrocarbon-bearing reservoir within the Caley, Baxter and Crespin intervals.
  • The company has planned a flow testing throughout the Caley and Baxter intervals.
  • It added that the flow tests provide critical production as well as fluid data in order to support development planning & FID

In another update, the company announced that it has appointed Mr Alex Doering as the Joint Company Secretary of the Company, which became effective on 30th August 2019.

The company has recently updated the market that it has closed its share purchase plan and raised around $3.5 million in addition to its successful $79 million capital raising, which was announced on 25 July 2019.

On the stock’s performance front, the stock of CVN was last traded at a price of A$0.370 per share on 13th September 2019. It provided negative return of 12.50% in the period of six months. On YTD basis, the stock has provided a return of 16.67%.

Yancoal Australia Limited

Yancoal Australia Limited (ASX: YAL) is into operation and development of open-cut-coal mines with a market capitalisation of A$3.9 billion as on 13th September 2019. The company has recently published its half-yearly results for the financial year 2019, wherein it was mentioned that the strong 1H results represented that the robust performance achieved by the company in 2018 has continued into 2019 as well.

  • During the time period (1H FY19), the company has wrapped up the early debt repayment amounting to US$500 million, which was announced in February and it intends to undertake additional pre-payments over the remainder of the year, consistent with its strategy.
  • YAL added that its consolidation as a leader in the international coal market continues and this would support the financial strength of Group in the future.
  • For the half-year ended 30th June 2019; the company reported profit before tax amounting to $492 million with a fall of $47 million from $539 million in 1H FY18.
  • It posted total operating EBITDA totaling to $940 million, reflecting a decline of $40 million from $980 million in 1H FY18. It added that the Operating EBITDA Margin stood at 40% for the period.

Operational Performance

  • It delivered total saleable coal production of 26.4Mt on a 100% basis with 17.8Mt attributable to Yancoal; comparable volumes were 25.4Mt and 16.4Mt respectively in 1H FY18.
  • On the safety front, it reported total recordable injury frequency rates of 7.29 at the end of 1H FY19 (on a 12-month rolling average) as compared to 8.89 at the end of 1H FY18.

On the stock’s performance front, the stock of YAL was last traded at a price of A$2.980 per share on 13th September 2019. It provided negative return of 23.58% in the period of six months. On YTD basis as well, the stock witnessed a decline of 19.91%.

Viva Energy Group Limited

Viva Energy Group Limited (ASX: VEA) is primarily engaged in the sale of fuel and specialty products via retail and commercial channels throughout Australia.

Changes and ceasing in Substantial Holdings

  • The company has recently announced that Perpetual Limited and its related bodies corporate has made a change in their substantial holdings with the current voting power of 6.22% against previous voting power of 8.42%.
  • In another update, the company mentioned that Legg Mason Asset Management Australia Limited and each of the specified bodies corporate have ceased to become a substantial holder in the company, which became effective on 4th September 2019.

Operational and Financial Performance

The company has recently published its results for the half-year ended 30th June 2019, wherein it has communicated about its operational and financial performance for the period:

  • It undertook renegotiation of the Alliance partnership with Coles Express as well as the acquisition of the Liberty Wholesale business.
  • VEA reported total sales of 7,126 million litres, reflecting a rise of around 2.5% on 1H FY18.
  • The net debt of the company stood at $168.7 million. It was a deterioration from net cash position of $0.2 million as on 31 December 2018. This includes the $137.0 million paid to Coles Express. This was for the Alliance agreement which was announced in February 2019.

On the stock’s performance front, the stock of VEA was last traded at a price of A$1.990 per share on 13th September 2019. It provided negative return of 21.88% in the period of six months. On YTD basis, the stock provided a return of 14.61%.


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