Whitehaven Coal earnings results

CommSec CommSec

 

18 February 2019

Results ($m)

Half Year 2019

Half Year 2018

Change

Revenue

1,270.1

1,146.4

+10.8%

Consensus

1,283.0

 

 

Unit Cost ($/tonne)

69.0

57.0

+21.1%

Net Debt (against 30 June 18)

244.2

270.4

-9.7%

Net Profit after Tax (NPAT)

305.8

256.2

+19.4%

Consensus

335.0

 

 

Interim Dividend ($)

0.20

0.13

+53.8%

Whitehaven Coal (WHC) misses consensus on higher costs & lower production

 

Results

  • Whitehaven Coal (WHC) posted a 19% lift in first half net profit to $305.8m. While this was a record result it fell short of the market’s expectations. WHC is the largest Australian producer of premium thermal and metallurgical coal (coal used in steelmaking process). 

Drivers

  • Revenue and profits were helped most by a 25% surge in realised A$ coal prices to an average of A$155/t in the first half. This was partly boosted by a lift in Chinese demand for higher quality Australian coal and a softer dollar which fell from US$0.78 in the prior corresponding period to US$0.72.  
  • The key metrics fell short of market hopes however due to a substantial lift in costs and lower sale volumes. Costs surged by 21.1% to A$69/t following a near 40% increase in crude oil prices which fed into the cost of fuel used in both the production and transportation process. 
  • WHC reduced its net debt by close to 10% to $244.2m over the six months to 31 December 2018. 

Dividend

  • WHC has declared a $0.20 per share dividend, payable on 6 March. This is comprised of a $0.15 interim dividend and $0.05 special dividend. It will trade ex-dividend on 26 February. 

Outlook

  • WHC cut its FY19 production guidance by around 4% due to ongoing geotechnical/engineering issues at its Narrabri underground coal mine in NSW. Cost guidance for the full year has increased to $69/t (previously $64/t) partly due to higher diesel prices and lower production. 

Share price

  • Its shares slumped by close to 7% in response to the 1H19 results. WHC shares remain 5.5% firmer so far this calendar year. 

Tags:

WHC

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