Whitehaven Coal shares rise after jump in full- year profits Coal outlook stays strong
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WHITEHAVEN Coal shares have jumped as the miner posted a near- 30 per cent hike in fullyear profit and signalled it expects continuing strong demand from coal- hungry Asian energy generators.
Improved volumes and high prices for premium thermal coal lifted Whitehaven’s profit for the year to June 30 by 29.7 per cent to $ 525.6 million. Revenue for the year was up 27.3 per cent to $ 2.26 billion.
Shares in the miner rose by up to 7 per cent during morning trading yesterday before slipping back, to be 3.5 per cent higher at $ 5.44 at 1.17pm ( AEST). Whitehaven reported a 7 per cent increase in production to 22.9 million tonnes for the year while thermal coal prices lifted, with the company saying prices hit a sixyear- high in recent weeks.
The demand outlook for coal remained strong, Whitehaven said, citing a near 9 per cent in- crease in total power generation in China in the year to May that has drawn increased coal imports.
Malaysia, Vietnam and Philippines had also increased coal imports as domestic gas production runs down, Whitehaven said.
The NSW- based exporter said new demand could come from Pakistan and Bangladesh, which are deploying new ultra- supercritical coal- fired power plants. The higher prices and demand have coincided with supply constraints from many exporters, with the US and Indonesia the only producers having responded to the recent improvements in the market.
Whitehaven managing director Paul Flynn said he expected prices of thermal coal to remain high.
“FY19 is shaping up as another strong year for the company with the outlook for coal demand in Asia set to remain strong across both established and emerging markets,” he said in a statement.
“Japan, Whitehaven’s largest thermal coal customer, has plans to build up to 30 new ultra super critical power stations as subcritical generation capacity is retired.”
The company said it had received an average price of $ US130 a tonne for its coal during the year, up from $ 112 a tonne in the previous year. As a result, its average earnings margin rose to $ A59 per tonne in 2018- 19, from $ A46 a tonne in the previous year.