- Whitehaven Coal Limited (ASX:WHC) is once again trading in narrow range where the stock seems to be waiting for the market response.
- The stock gained ~ 11.57 per cent in a single trading session on 15 October 2020 after disclosing price-sensitive information.
- WHC announced its September 2020 quarterly production figures and refined FY2021 cost guidance on 15 September 2020.
Whitehaven Coal Limited (ASX:WHC) is once again trading in a range, where the stock seems to be waiting for a different market response after announcing price-sensitive information on 15 October 2020.
The Company announced its September 2020 quarterly production figures and changeed FY2021 cost guidance, leading to a gush in the stock price on the exchange with WHC surging by ~ 11.57 per cent in a single trading session.
Managed Coal Production and Sales Figures
On the production and sales counter, WHC witnessed some good numbers for the period ended September 2020 against pcp. Apart from a quarterly growth, the production and sales figures also increased on a YTD basis against pcp.
Managed Coal Production and Sales Figures (Source: Company’s Report)
- The Company produced 4,485k tonnes of managed ROM coal during the quarter, up by 4 per cent against the previous corresponding period (or pcp). Moreover, the managed saleable coal production surged by 2 per cent against pcp to stand at 4,857k tonnes.
- Apart from an increase in the production for the period, WHC also witnessed an increase in sales with the total managed coal sales surging 13 per cent against pcp to stand at 6,030k tonnes.
- The Company managed sales of produced coal soared by 15 per cent during the period against pcp; however, managed sales of purchased coal decline by 10 per cent against pcp.
- At the end of the period, WHC witnessed a 5 per cent decline in coal stocks against pcp.
Equity Coal Production and Sales Figures
Apart from an increase in managed coal figures, WHC also reported a decent increase in equity coal production and sales figures.
The equity ROM coal production surged by 6 per cent during the period against pcp to stand at 3,622k tonnes. Likewise, equity saleable coal production increased by 3 per cent against pcp to stand at 3,939k tonnes.
Equity Coal Production and Sales Figures (Source: Company’s Report)
The total equity coal sales for the period remained 13 per cent high against pcp to stand at 4,975k tonnes. While the equity sales of produced coal soared by 16 per cent against pcp, the equity sales of purchased coal declined by 9 per cent against pcp.
Resembling the managed coal production and sales figures the equity coal production and sales also witnessed a quarterly as well as a YTD increase against pcp.
Thermal and Metallurgical Coal Outlook
WHC suggested that coal markets rallied in September 2020 as Asian economies started to recover, which coupled with the coal supply curtailments during the same period provided a cushion to the coal market from its August 2020 lows.
Furthermore, the Company suggested that due to a recovery in steel sectors across Asia and India, both the markets have resumed shipments under their term contact, and WHC’s thermal coal sales have been unaffected by any deferrals.
Moreover, the Company sees an increase in tenders and enquiries ahead of the traditionally stronger Asian winter demand period.
FY2021 Guidance Update
WHC refined its unit cost guidance for FY2021 in the range of $69 to $72 per tonne, reflecting the strong sales performance in the September quarter and the initial benefits from WHC’s costs out programmes.
The stock reacted sharply on the exchange with a day’s gain of over 11 per cent on 15 October 2020; however, it now there seems to be profit booking as the stock closed 3.7 per cent down at $1.020 on 16 October 2020.
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