15 February 2018

Half Year Result FY2018 – Higher coal prices drive record H1 profit

Whitehaven Coal has reported a net profit after tax of $257.2 million for the half year ended 31 December 2017.

All key financial performance metrics improved on the previous corresponding period (pcp):

Sales revenue of $1,146.4 million, up by 39% pcp;
Operating EBITDA of $460.6 million rose by 42% on pcp on higher coal prices;
Cash generated from operations of $409.7 million, an increase of 55% on pcp;
Net debt was reduced to $146.9 million with gearing falling to 4%;
The Board has resolved to pay an interim dividend of 13 cents per share.

Operating Highlights

Equity ROM coal production and sales of coal including purchased coal of 8.4Mt and 9.2Mt, 2% and 18% higher respectively than the pcp reflecting the ongoing ramp up of Maules Creek mine and solid production from the other mines in the portfolio.

The sales mix for the half year comprised 68% high CV thermal, 17% low CV thermal and 15% metallurgical coal. The higher proportion of low CV coal in total sales was due to stock reductions which had been built in the final quarter of the previous year.

FOB costs of $60/t (excluding royalty) were consistent with guidance for the half year.

Guidance

FY2018 guidance for saleable coal production was revised to the range of 20.5Mt to 21.0Mt following reduced production from the Narrabri mine during the first half. Costs for the year are likely to increase slightly as modestly higher costs at Narrabri are factored into the result.

Commenting on the results, Whitehaven Coal Managing Director and CEO Paul Flynn said:

“It is pleasing to report a record first half-year profit. The result represents the culmination of a growth strategy that has been in place for a number of years. Firstly, the development of the Narrabri underground mine set the company on a growth path. This was followed by the development of the Maules Creek open cut mine which added significant production to the portfolio. At the same time, the successful reduction in costs across the entire Whitehaven business and recent higher coal prices have enabled the company to generate this great result.

“We continue to see strong interest from potential new customers throughout Asia. Many are seeking Whitehaven’s high quality coal for their power stations and steel mills – either planned, under-construction or newly built.

“Now that our major capital programme is behind us it is pleasing to reward shareholders with an interim dividend. The dividend points to the confidence that Whitehaven’s Board has in the future prospects of the company.”

The full documents regarding the result can be found below:

Half Year Financial Results FY18 Release

Half Year Financial Results FY18 Presentation

Appendix 4D and Interim Financial Report

The audio of the Investor Conference Call can be found below.