LA Private

Whitehaven Coal achieves strong results despite challenges

Whitehaven Coal (ASX:WHC) has announced robust financial results for the fiscal year 2023, overcoming operational challenges. 

During FY23, Whitehaven Coal encountered difficulties such as flooding, weather delays, labor shortages, and operational constraints at Maules Creek.

Despite these obstacles, the company successfully met its production and sales targets.

Whitehaven Coal achieved an average coal price of A$445 per tonne in FY23, surpassing the previous year’s high of A$325 per tonne.

The average price moderated to A$264 per tonne in the June quarter, primarily due to seasonally lower demand and elevated customer inventories.

However, Whitehaven Coal maintained a 10% premium to the gC NEWC index of US$161 per tonne for thermal coal.

The June quarter witnessed a 19% increase in managed run-of-mine (ROM) production, reaching 5.1 million tonnes compared to the previous quarter. The total managed ROM coal production for FY23 was 18.2 million tonnes, within the guidance range of 18.0-19.2 million tonnes.

Whitehaven Coal reported stable equity sales, with total equity sales of produced coal amounting to 3.3 million tonnes in the June quarter, consistent with the previous quarter.

However, the FY23 total equity sales of produced coal reached 13.0 million tonnes, representing an 8% decline compared to FY22. The company’s managed sales of produced coal for FY23 stood at 16.0 million tonnes, within the projected range of 15.3-16.0 million tonnes.

Whitehaven Coal demonstrated strong cash generation, reporting $435 million from operations in the June quarter and $4.2 billion for FY23. As of June 30, 2023, the company maintained a net cash position of $2.65 billion, ensuring financial stability.

In FY23, Whitehaven Coal executed a share buy-back program, repurchasing 38.92 million shares for $255.8 million in the June quarter. The total investment for share buy-backs in FY23 amounted to $948.9 million, leading to the acquisition of 119.67 million shares.

CEO Paul Flynn acknowledged the operational challenges faced during FY23. He stated, “Despite the obstacles encountered, we achieved our production and sales targets. The record coal prices in FY23 reflect the demand for our high-quality products.”

Flynn further commented, “In the June quarter, we generated $435 million in cash from operations, and our net cash position stands at $2.65 billion. Returning $1.6 billion of capital to our shareholders through dividends and buy-backs demonstrates our commitment to creating value. With a resilient balance sheet and strong demand for our premium products, Whitehaven Coal is well-positioned to continue generating robust cash flows and delivering value to our shareholders.”

Whitehaven Coal is scheduled to provide a detailed analysis of its financial results during the FY23 earnings announcement on August 24.