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The share price of Whitehaven Coal Ltd (ASX: WHC) is experiencing a sharp decline today, dropping by 6.4% to $7.03 from the previous day's close of $7.51. This significant downturn comes on the heels of the release of Whitehaven's half-year results for the six months ending 31 December (H1 FY 2024). ASX mining stocks, including Whitehaven Coal Ltd, are closely monitored for their financial performance and market reactions, reflecting investor sentiment towards the mining sector.Here are the key highlights from the report:
Highlights of Whitehaven's Half-Year Results:
- Revenue amounted to $1.59 billion, marking a considerable decline of 58% compared to H1 FY 2023.
- Underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at $623 million, representing a stark 77% decrease year-on-year.
- Underlying net profits after tax (NPAT) saw a notable decline to $372 million, down from $1.79 billion in H1 FY 2023.
- Net cash decreased by 43% to $1.50 billion.
- The company announced a fully franked interim dividend of 7 cents per share, significantly lower than the prior interim dividend of 32 cents per share.
Other Key Metrics and Developments:
- Despite the challenging financial performance, coal production increased during the period, with run-of-mine (ROM) production rising by 17% to 10.35 million tonnes.
- However, unit costs per tonne escalated to $111, marking a 16% increase from the prior corresponding half-year, while coal stocks declined by 34% to 1.23 million tonnes.
- Whitehaven reported an average realized price of AU$220 per tonne over the six months.
- A significant development during the period was Whitehaven's intention to acquire the Daunia and Blackwater metallurgical coal mines from the BHP Group Ltd (ASX:BHP) Mitsubishi Alliance.
Management's Perspective:
- Whitehaven's CEO, Paul Flynn, expressed confidence in the progress of the acquisition of the Daunia and Blackwater mines, emphasizing the company's transformation into a metallurgical coal business.
- Flynn highlighted the financing structure for the acquisition and the expected completion timeline, aiming for early April, pending regulatory approvals.
Future Outlook:
- Looking ahead, Whitehaven provided FY 2024 guidance, forecasting managed ROM coal production of 18.7 million to 20.7 million tonnes and managed coal sales ranging from 16.0 to 17.5 million tonnes.
- Unit costs (excluding royalties) are anticipated to be in the range of $103 to $113 per tonne, with capital expenditure forecasted at $400 million to $450 million (excluding acquisition costs).
Share Price Performance:
- Despite today's significant decline, the Whitehaven share price has shown resilience, with a 24% increase since the lows recorded on 31 May. However, over the past 12 months, the share price has experienced a notable downturn, declining by 14%.
The release of Whitehaven's half-year results, coupled with the announcement of the acquisition of the Daunia and Blackwater mines, has contributed to significant fluctuations in the company's share price, highlighting the volatility and uncertainty surrounding the coal industry.
