- Whitehaven Coal (ASX:WHC) has pared its sales guidance for financial year 2021.
- The downgrade in guidance is due to the recent floods and outage at the Port of Newcastle.
- Even as the company said that the ongoing floods may not impact any of its operations, there is a possibility of temporary inundation of local roads which could disrupt workforce movements and product haulage.
Whitehaven Coal Ltd (ASX:WHC) on Tuesday said that it had trimmed its sales guidance for financial year 2021. The cut in guidance is due to the recent floods and outage at the Port of Newcastle. Newcastle Coal Infrastructure Group had suspended shipbuilding operations at the Port of Newcastle due to two week of repair works of its shiploader. The vessel movements were also affected due to the extreme weather-induced restrictions.
Source: © Kustovelexy | Megapixl.com
Besides factoring in floods-induced hindrances, the company’s downgrade of guidance also takes into account the recent production performance at Maules Creek and a slower than expected ramp-up of production at Narrabri following the mining through geological faults in Q2 and Q3 FY2021.
As reflected by the revised guidance, the company expects a narrowing of ROM coal production ranges and a reduction in managed coal sales. Meanwhile, the situation regarding the floods and its impact on port and infrastructure continues to develop, and remains the focus of continued observation and evaluation.
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Coal sales expectations
Even as the company said that the ongoing floods may not impact any of its operations, there is a possibility of temporary inundation of local roads which could disrupt workforce movements and product haulage. However, the company is still upbeat about meeting its target of coal sales. Whitehaven said that it would manage coal sales in the range of 18.5 million to 19 million tonnes.
Managed ROM coal production is now expected to be between 21.4 million and 22 million tonnes, down from its previous guidance range of between 21 million and 22.5 million tonnes.
Whitehaven Coal Ltd stock was trading at A$1.76, up 0.57 per cent on 23 March 2021, compared to the previous closing. The stock is up nearly 6 per cent so far this year.