26 August 2020

Full year results FY20

Lower prices impact earnings

Safety performance

The safety outcome for the Group for the 12 months ending 30 June 2020 was a total recordable injury frequency rate (TRIFR) of 4.13, the lowest ever for the company. The Group TRIFR remains well below the New South Wales (NSW) coal mining average of 14.64.

The company is committed to the goal of achieving zero harm to its people and the environment.

The rapid implementation of our COVID-19 response plan has helped to keep our people and their families safe and supported continuity of production and employment.

Financial highlights

• Underlying net profit after tax (NPAT) of $30.0m, a decrease of 95%
• Underlying EBITDA of $306.0m, a decrease of 71%
• Operating cash flows of $146.4m, a decrease of 84%
• FY20 earnings reflect the softening of gC Newcastle thermal prices and the impact on ROM production of previously reported labour shortages and dust events at our largest mine, Maules Creek, and the scheduled eight week Narrabri mine longwall move
• Net debt of $787.5m at 30 June 2020
• Dividends of $312.2m were paid during the period
• Refinanced our A$1.0bn secured bank debt facility, now maturing in July 2023
• $468.8m of available liquidity

Operating performance

Equity ROM coal production for FY20 was 16.5Mt, 4% below the previous corresponding period (pcp), reflecting the eight week Narrabri longwall change out, the challenging production conditions at Maules Creek due to labour shortages and disruption due to drought and bushfires, and the impact of unmapped historical underground workings at Werris Creek.

Equity coal sales, including purchased coal, were 16.6Mt, in line with the pcp.

Equity metallurgical coal sales were 17% of total FY20 sales, below pcp at 21%.

Corporate highlights

During FY20 Whitehaven executed on a number of equity and debt transactions.

On 2 January 2020, Whitehaven announced it had completed the acquisition of EDF Trading Australia Pty Limited, which owned a 7.5% interest in the Narrabri underground mine. Closing the acquisition brings Whitehaven’s ownership interest in the mine to 77.5%, effective as of 1 July 2019.

On 19 February, Whitehaven refinanced its senior bank debt facility with a syndicate of Australian and international banks. The new facility is a senior secured syndicated revolving corporate debt facility with an aggregate limit of AUD1.0bn and able to be utilised for general corporate purposes with bilateral bank guarantee capacity. The term has been extended to mature in July 2023.

During the June quarter a Japanese export credit agency facility of A$51.7m was finalised with two leading Japanese banks and the Nippon Export and Investment Insurance Company. The eight-year facility is fully amortising and is on terms that are consistent with the main funding facility of the group. The facility reimbursed Whitehaven for certain expenditures associated with upgrading the Tarrawonga overburden and coaling fleet.

On 12 August, the NSW Independent Planning Commission (IPC) approved the Vickery Extension Project. The Vickery Extension Project is a proposed open cut mine with a 20-year mine life in the Gunnedah Basin with marketable reserves of 178Mt. The mine will produce a majority metallurgical coal for steel-making, with the balance being high quality thermal coal destined for premium export markets in our region.

Commenting on today’s results, Whitehaven Coal Managing Director and CEO Paul Flynn said:

“I am proud of our team in delivering a record safety result and rounding out the full year with strong operational performance including in the face of challenges brought about by COVID-19.

“Significant contraction in coal prices disproportionately impacted our headline financial results but it was pleasing to be able to reward investors and pay out $312m in dividends through the period.

“The NSW Government’s recent approval of Vickery was a significant achievement but, given continuing short-term economic uncertainty, we remain cautious about expansion and capital allocation.

“Our immediate focus is on achieving greater efficiency and more consistent operational performance in anticipation of markets rebalancing and price improvements beginning to flow through.

“We are confident about the continuing demand for high quality coal in a more carbon conscious world and the major role it will play as part of the global economic recovery.”

For more visit our Results Centre.

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