17 February 2022
Half Year Results FY22
Record first-half year EBITDA and NPAT; Up to $480m of capital management – dividend of 8.0 cents per share and up to $400m share buyback
The safety outcome for the Group for the 12 months ending 31 December 2021 was a total recordable injury frequency rate (TRIFR) of 6.1.
The Company is committed to achieving zero harm to its people and environment, and management is striving for better safety performance across all operations.
- Record first-half year EBITDA of $632.6 million and net profit after tax (NPAT) of $340.5 million, reflecting an average achieved coal price for H1 FY22 of A$202/t
- Cash generated from operations of $567.4 million
- EBITDA margin of 55% on own coal sales (A$102/t versus pcp of A$5/t)
- Net debt of $403.4m as at 31 December 2021, which is 50% lower than at 30 June 2021. The company is on track to repay in full its senior bank facility shortly and to be in a net cash position in March 2022.
- After considering the H1 FY22 results and expectations for the year, the Board has declared an interim unfranked dividend of 8 cents per share, and intends to undertake an on-market share buyback programme up to 10% of issued shares, and capped at $400 million in total.
- FY22 guidance remains unchanged
As announced in October, the Company entered into an agreement to acquire the 1% Private Royalty over the Narrabri Coal mine from Anglo Pacific Group plc (APG), with effect from 31 December 2021. The consideration of US$26.6 million, plus contingent revenue participation payments, is payable over five years to 31 December 2026. During the half, the company made the first payment US$4.4 million.
During H1 FY22, Whitehaven achieved a number of key milestones for our development projects.
- On 16 September 2021, the Federal Minister for the Environment approved the Vickery Extension Project under the Commonwealth’s Environment Protection and Biodiversity Conservation Act 1999.
- In January 2022, the NSW Department of Planning, Industry and Environment (DPIE) recommended the Narrabri Underground Mine Stage 3 Extension Project be approved. The project was referred to the Independent Planning Commission (IPC), which will now review the project. We expect the IPC to make its determination during Q2 CY22.
- The company’s Winchester South project has recently completed the Public Notification phase for the Draft EIS and the project team is working with Queensland’s Office of the Coordinator General to address submissions received.
Coal market outlook
The gC NEWC index achieved a record monthly high in October at US$222/t. It averaged US$176/t per month in H1 FY22, up 78% from the H2 FY21 average of US$99/t. In January and February 2022, it set new record highs. The ongoing energy shortage is reflected in the prices being offered for spot physical gC NEWC coal deliveries where prices are approaching US$300/t in the first quarter of CY22. We expect demand for seaborne thermal coal to remain strong in CY22 and the supply side response to those high prices to remain muted.
Coal prices are expected to be well supported over CY22.
Comments from Managing Director and CEO Paul Flynn
“High prices for thermal coal have driven record half year earnings and cash flows.
“Our rate of cash generation means debt is now all but paid down and affords considerable flexibility in regards to capital management.
“The Board’s decision to restart dividends and implement an on-market share buyback delivers value for our shareholders both today, and over the longer term.
“In a world where access to reliable and affordable energy is more important than ever, our investment thesis is a compelling one.”
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