Whitehaven (ASX:WHC) slashes output forecast, shares drop on ASX

The share price of coal mining and exploration company, Whitehaven Coal Limited (ASX:WHC) closed 6.102% down at AU$2.770 per share on Friday. The company has released its December quarterly report and FY22 guidance.

December quarter update

Unusual heavy rains that caused floods in the east side of Australia resulted in the low of road access to the mines for over two weeks. The December quarter was also affected significantly by the Covid-19 as it resulted in a labour shortage.

• The coal pricing averaged for the December quarter is AU$211 per tonne.
• 3Mt managed run of time (ROM) production is recorded.
• 0Mt managed saleable cold production is reported.
• The total managed coal sales stood at 4.0Mt, total equity coal sales at 3.3Mt, managed own coal sales at 3.5Mt and equity sales of own coal at 2.9Mt.
• As of 31 December 2021, the managed coal stocks stand at 2.1Mt.
• The Narrabri Underground Longwall Mine was relocated from 109 to 110 panels successfully.
• By February 2022, the company expects to repay its senior debt facility, and by March 2022, the company will be in a net cash position.

FY22 guidance

The production targets for the financial year 2022 have been cut down by 5%.

• Managed run of mine (ROM) production has been cut down to 19 to 20.5 Mt from 20-21.5 Mt in previous guidance.
• The managed coal sales have been brought down to 17.2 – 17.8 Mt from 18 – 18.6 Mt in previous sFY22 guidance.
• The cost of coal has also been updated in the FY22 guidance, with the cost of coal increasing to AU$79 – AU$84 per tonne, from AU$72-AU$76 per tonne. The cost guidance includes an increase in diesel prices, increased demurrage costs, workforce absenteeism and volumetric impacts of flooding.

Paul Flynn, CEO of Whitehaven, commented,

In February 2022, Whitehaven will release its HYFY22 results, and in August 2022, full-year FY22 results will be released.