Whitehaven profits rise on rising coal prices

Whitehaven Coal reported record after-tax net income of $2 billion for the year ended June 30, 2022 and EBITDA of $3.1 billion, a significant increase from the $204.5 million for the last year.

The exceptional results of the year also include:

  • An 8% improvement in safety performance, measured by a Total Recordable Injury Frequency Rate of 5.4
  • Managed run-of-mine production volumes of 20 million tonnes, which was within the forecast range
  • Record revenue of $4.9 billion supported by an average coal price of $325/t (compared to revenue of $1.56 billion and an average price of $95/t the previous year)
  • Cash generated from operations of $2.6 billion compared to $169.5 million the previous year.
  • In FY22, all senior bank debt was repaid and $1 billion of net cash was held on the balance sheet as of June 30, compared to $808.5 million of net debt in the same period of 2021.

A final fully franked dividend of 40 cents per share will be paid on September 16, bringing the annual dividend to 48c per share.

Following the announcement of a 10% market buyback in February 2022, 76.37 million shares were repurchased in H2 FY22 at an average price of $4.75 and an investment total of $362.6 million.

In the first half of FY23, Whitehaven aims to complete the 10% buyback within the previously announced cap of $550 million. The board will seek shareholder approval to increase its share buyback program at the company’s annual general meeting in October.

Whitehaven CEO Paul Flynn said longer-term underinvestment in the energy sources needed to provide base load capacity to growing populations and economies had contributed to widening the gap between the Offer and demand.

“In FY22, we saw global energy shortages escalate following the tragic conflict in Ukraine and associated sanctions against Russian coal and gas,” he said.

“Coal prices are at record highs and customers are more focused than ever on energy security. We have worked hard to position ourselves to maximize the opportunity arising from historically high prices.

“Despite COVID-related absences, labor constraints, and weather disruptions, our team delivered strong operational and product quality improvements in FY22.”

Flynn said demand for high-quality marine thermal coal is expected to remain strong through FY23 and high-CV coal prices should continue to be well supported.

“We expect to deliver higher ROM production and coal sales in FY23 compared to FY22, and are focused on maximizing margins, including managing inflationary pressures on costs,” he said.

“We will also continue to advance and refine plans for our Vickery (NSW) and Winchester South (Queensland) development projects in FY23 to position the business to bring in additional capacity should the board administration determines that appropriate returns can be generated.”

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