Whitehaven’s Stock Soars On The Release Of September Quarter Results

Independent coal miner Whitehaven Coal Limited (ASX:WHC) today released its September Quarter Production report with ROM coal production of 3.62Mt and managed saleable coal production of 3.98Mt for three months ended 30 September 2018. This reflects a considerable downtrend of 37% and 32% compared to previous corresponding period’s 5.73Mt of ROM coal production and 5.88Mt of managed saleable coal production, respectively.

The group has achieved the average price of US$128 per tonne for its metallurgical coal sales in the three-month period ended 30 September 2018, lower than US$131 per tonne reported in previous quarter. Whereas, based on backward-looking average indexes for metallurgical coal, the benchmark prices in September quarter were set to US$188 per tonne for hard coking coal, US$137 per tonne for low-vol pulverized coal injection (LV PCI) and US$129 per tonne for semi-soft coking coal (SSCC).

Equity coal sales, including sales of purchased coal, for the September quarter were 4.05Mt, down 14% on the previous corresponding period. This reflects the sales higher than what it has been produced during September quarter as the stock piled up at the end of FY18 have been drawn-down. Whereas, sales of managed coal were 4.85Mt in September 2018 quarter, down 20% on pcp’s managed total coal sales of $6.08 Mt.Â

Whitehaven Coal’s Managing Director and CEO, Paul Flynn stated the company has been witnessing a strong demand and continuous growth of high-quality coal production which leads to the sustainability of high prices. He also reaffirmed the production guidance which is said to be on track to achieve the range of 22.0Mt and 23.0Mt saleable coal production in fiscal 2019. Further, it has been informed that production at Narrabri has ramped up as per the schedule while the full longwall changeout has been completed in mid-September.

On the safety front, the group has shown a slight improvement from previous quarter’s safety performance and remains well below the NSW coal mining average of 14.67. Whitehaven’s total recoverable injury frequency rate (TRIFR) has gone to 7.29 at the end of September quarter, higher than 6.91 in June quarter.

After completing the acquisition of Rio Tinto’s 75% stakes in the Winchester South coal project in June quarter, Whitehaven Coal has advanced the data gathering and Resource assessment work for the project during past three months ended 30 September 2018.

Winchester South is an open cut coal project, covered by mining development lease MDL183. It is located in the Bowen Basin in Queensland. In a statement, WHC stated that the project Director and compact team of technical is appointed for the Winchester South coal project.

The payment of FY18’s final dividend of 27 cents per share amounting to $268 million, was paid during September quarter, i.e. on 13 September 2018. Moreover, the group has lodged EIS for Vickery Extension Project with the Department of Planning and Environment (DPE) in early August which will remain in place for public display until 25 October.

In today’s trading session, Whitehaven’s share price surged 1.481% or $0.080 to close at $5.480 on 16 October 2018. While the stock has witnessed a performance change of +53.08% over the past one year, today it traded at a PE of 10.150 x with market capitalization of $5.54 billion.

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