Whitehaven Coal’s half-year profit has skyrocketed thanks to a jump in coal prices late last year and increased production.
The east coast miner’s net profit of $157.5 million for the six months to December 31 is up from $7.8 million a year ago.
Revenue has also jumped sharply from the same time last year - up 43 per cent to $823.5 million.
“Whitehaven Coal is capturing the benefit of the improved coal price environment, aided by a sustained focus on cost reduction,” Chief Executive Paul Flynn said.
The profit growth during the quarter was driven by a sharp rebound in coal prices during the last few months of 2016.
The company said it received an average price of US$92 ($119.63) a tonne for thermal coal and US$104 ($135.23) a tonne for metallurgical coal during the December quarter. For the half, its realised price averaged $106 a tonne, compared to $78/t in the 2016 first half.
As a result, its average profit margin on coal sales jumped to 42 per cent during the first half, from 19 per cent a year earlier.
Coal sale volumes also rose, by 6 per cent, to 7.8 million tonnes, helped by higher production at its two main mines — Narrabri and Maules Creek in NSW.
Last month, the company had lowered the production guidance for its Narrabri mine by about 6 per cent after encountering “adverse geotechnical conditions” at the site, but today it reaffirmed its guidance for full-year coal production to be between 21 million and 22 million tonnes.
Whitehaven said production in the second half of FY2017 is planned to be higher than in the first half.
It did not declare an interim dividend, but Mr Flynn said the increased profits and strong cash flows meant the business was well positioned to accelerate debt reduction.
* Net profit $157.5 million vs $7.8 million a year ago
* Sales revenue up 43per cent to $823.5 million.
* No dividend, unchanged.
Image: Miner’s half-year profit has skyrocketed thanks to higher prices and cost-cutting, The West Australian