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Highlights
- Coal prices are hovering around all-time highs of US$425/t.
- Europe is in a deep energy crisis due to the ongoing war between Russia and Ukraine.
- Australian coal miners seem to be well-positioned to tap opportunities amid this global energy crisis.
- Amidst the current market scenario, Australian coal players have given impressive YTD returns.
Thanks to the European energy crisis, coal prices are hovering around their all-time high level of US$425/t. This steep movement in coal prices is because of increased demand for the fossil fuel as the existing energy sources, including nuclear and hydropower plants (around 38%) are facing operational issues.
France is currently facing draught, as a result water use is restricted in many areas. The Rhone River has been instrumental in providing cold water for cooling the nuclear reactors but due to draught, the water from the river could not be used as coolant.
Similarly, the Rhine River in Germany, popularly known as the "coal river”, is also facing drought issues. It has caused a high reduction in the transport of coal. Along with this, the decline in the gas supply from Nord Stream 1 due to the Russia-European Union tension, Europe is reeling under severe energy crunch, putting pressure on energy commodities.
However, all these factors may have some silver linings for Australian coal companies. Australia is the largest exporter of metallurgical coal and the second largest exporter of thermal coal, as per Resources and Energy Quarterly data for the June 2022 quarter.
In this article, we at Kalkine Media® will discuss a few Australian coal players that have given impressive YTD returns.
Whitehaven Coal Limited (ASX:WHC)
Australian thermal and metallurgical coal player, Whitehaven Coal Limited has reported record revenue of US$4.9 billion with an average coal price of A$325/t. This revenue is US$3.34 billion higher from the last years value, based on the average coal price of only AU$95/t. Similarly, cash generated from operations saw a phenomenal rise, growing to US$2.6 billion compared to h US$169.5 million in the prior year.
The company also reported a record Net Profit After Tax (NPAT) of US$2.0 billion for the financial year ended on 30 June 2022. The company saw its EBITDA rising to US$3.1 billion, up US$204.5 million year-on-year.
New Hope Corporation Limited (ASX:NHC)
Queensland-based New Hope Corporation is into coal mining, exploration, port operation, conventional oil, agriculture, etc.
In its recently released quarterly report, the company reported its total saleable coal production as 1,907 kt, out of which total coal sold stood at 1,850 kt. The company’s Underlying EBITDA for the quarter saw a major push from strengthening coal prices and stood at a value of AU$645 million.
The company invested AU$94.4 million into Malabar Resources Limited, based on which the company's cash and cash equivalents stood at AU$815 million with AU$504 million in closing receivables. The company performed strongly at Bengalla even after uncontrollable adverse weather conditions.
Coronado Global Resources Inc. (ASX:CRN)
Coronado Global is amongst the world's largest producers of high-quality metallurgical coal, with operations in Bowen Basin in Queensland, Australia and the Central Appalachian in the US.
In its 2022 half-yearly result, the company reported record revenues ofUS$1,980 million with a net income of US$562 million.
The adjusted EBITDA for the half-year period stood at US$849 million, with the group average realised metallurgical coal price of US$293/t. The company showcased a strong net cash position of US$171 million with available liquidity of US$586 million. Based on these strong numbers, the company announced a total dividend of US$125 million which comes out to be US$ 7.5 cents per Chess Depositary Interest (CDI).
Yancoal Australia Ltd (ASX:YAL)
New South Wales-based Yancoal Australia is Australia's largest pure-play coal producer. Yancoal reported an impressive increase in its revenue of 167% to AU$4.8 billion during 1H 2022 as compared to pcp. The company realised an average coal price of AU$314/t during the reported period.
The operating EBITDA for the period stood at a record value of AU$3.2 billion, and with a healthy operating margin of 65%, the operating cash inflows reached a value of AU$2.8 billion. The company declared an interim dividend of AU$696 million, that's AU$0.5271/share.
