14 February 2019

Half Year Result FY2019 – Record first half result

Whitehaven Coal, the leading Australian producer of premium thermal and metallurgical coal, has reported a record net profit after tax of $305.8 million for the first half of FY2019.

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

Sales revenue of $1,270.1 million, up 11%;
Underlying EBITDA before significant items of $550.8 million, up 12%;
Cash generated from operations of $463.8 million, up 5%;
Net debt reduced to $244.2 million (excluding AASB 16 lease liabilities) at 31 December 2018 with gearing at 7%;
The Board has proposed to pay an unfranked dividend of 20 cents per share to shareholders to be comprised of an interim dividend of 15 cents and a special dividend of 5 cents: and
Unit costs increased to $69/t in the half with the rise due predominantly to higher diesel prices, , higher logistic costs, increased coal washing and to align with new product strategy at Maules Creek and lower production from the low cost mines.

Operating Highlights

Managed ROM coal production of 11.0Mt was in line with the pcp and coal sales of 10.3Mt, were 14% below the pcp.

Strong production in the December quarter from both Maules Creek and Narrabri led to a strong finish to the first half. Maules Creek produced a record 6.2Mt ROM coal in the half and is on track to achieve its approved run rate of 13Mtpa ROM coal in the second half.

Metallurgical coal sales were 18% of total sales during the half with pricing relativity between metallurgical and thermal coal belatedly starting to incentivise more sales of metallurgical coal towards the end of the period.

Guidance

FY2019 guidance for saleable coal production is updated to be in the range of 21.5Mt to 22.5Mt.

Cost guidance for the full year has increased to $67/t (excluding royalties) from previous guidance of $64/t. Lower production in the September quarter, associated underutilised logistics and demurrage impacts, as well as higher diesel prices were the key reasons for the cost guidance increase.

Economic and social contribution

During the half year Whitehaven and its Joint Venture partners made significant contributions to the economies of New South Wales (NSW) and the north west NSW region.

$108.7 million paid to the NSW Government in mining royalties;
Committed $120,000 over 3 years to the establishment of the Clontarf Academy at the Narrabri High School;
Donated $157k to local community groups including $60k for drought relief in the local region;
Moved all local suppliers to industry-leading, 21-day payment terms.

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

“I’m pleased to report a record half year financial result and an interim dividend for shareholders which takes the total shareholder return over the past 18 months to 80 cents per share, or almost $800 million.

“Importantly, we have achieved this result in spite of higher, but moderating costs, underscoring the resilience of the business as it continues to grow in scale across two of Australia’s highest quality coal basins.

“With first-rate development assets in our Vickery and Winchester South projects, we are strongly positioned to meet the wave of demand for quality thermal and metallurgical coal we are seeing through the region.

The full documents regarding the result can be found below:

Half Year Financial Results FY19 Release

Half Year Financial Results FY19 Presentation

Appendix 4D and Interim Financial Report

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

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