Whitehaven profits surge on rising coal prices
Monday, August 29th, 2022
Whitehaven Coal has reported a record net profit after tax of $2 billion for the year ended June 30, 2022, and EBITDA of $3.1b, a significant increase on the $204.5m in the prior year.
The outstanding year results also include:
- An 8 per cent improvement in safety performance as measured by a total recordable injury frequency rate of 5.4
- Run-of-mine managed production volumes of 20m tonnes, which was within guidance range
- Record revenue of $4.9b underpinned by an achieved average coal price of $325/t (compared with $1.56b revenue and $95/t average price in the prior year)
- Cash generated from operations of $2.6b compared with $169.5m in the prior year.
- During FY22, all senior bank debt was repaid and $1b of net cash was held on the balance sheet at June 30, versus $808.5m of net debt at the same time in 2021.
A fully franked final dividend of 40 cents per share will be paid on 16 September, taking the full year dividend to 48c per share.
After announcing a 10 per cent on-market share buy-back in February 2022, 76.37m shares were bought back in H2 FY22 for an average price of $4.75 and a total investment of $362.6m.
In H1 FY23, Whitehaven aims to complete the 10 per cent buy-back within the previously announced cap of $550m. The board will seek shareholder approval to increase its share buy-back program at the Company’s Annual General Meeting in October.
Whitehaven chief executive officer Paul Flynn said the longer-term under-investment in energy sources needed to supply baseload capacity to growing populations and economies had contributed to a widening gap between supply and demand.
“In FY22, we saw global energy shortages intensify as a result of the tragic conflict in Ukraine and associated sanctions against Russian coal and gas,” he said.
“Coal prices are at record levels and customers are focused on energy security now more than ever before. We have worked hard to position ourselves to maximise the opportunity arising from historically high prices.
“Despite COVID-related absences, labour constraints and weather interruptions, our team delivered solid operational and product quality improvements in FY22.”
Flynn said demand for high-quality seaborne thermal coal is expected to remain strong throughout FY23 and high-CV coal prices should continue to be well supported.
“We expect fo deliver higher ROM production and coal sales in FY23 compared with FY22, and we are focused on maximising margins including managing inflationary cost pressures,” he said.
“We will also continue to progress and refine plans for our Vickery (NSW) and Winchester South (Queensland) development projects in FY23 to position the company to bring on additional capacity if the Board determines appropriate returns can be delivered.”