Australia’s independent metallurgical and premium thermal coal producer, Whitehaven Coal Ltd [ASX: WHC], recorded positive results in the financial year ending 30 June 2018.
This was reflected in Whitehaven Coal’s share price, which climbed by 5.32% today, trading at 5.52 in today’s market.
Record profit aiding Whitehaven Coal’s share price
After providing its financial results for the full year ending 30 June 2018, Whitehaven saw growth in key financial performance merits which could be behind the rising share price.
They hit a record net profit after tax of $525.6 million, with sales revenue up 27% at $2,257.4 million. WHC’s underlying EBITDA (earnings before interest, taxes, depreciation and amortization) of $940.0 million is up 32%, as well as a 30% increase in cash generation at $854.0 million.
This, along with a reduction in net debt to $270.4 million, and a 7% gearing, saw unit costs remain in the best quartile.
Whitehaven’s Managing Director and CEO, Paul Flynn, commented on the record results, saying:
‘It is a compelling and tangible illustration of how Whitehaven has successfully set about building a portfolio of quality assets and executing against ab agreed strategy.
‘…we are at an exciting stage in the company’s evolution in that we are bringing together quality production assets and a development pipeline offering greater scale and geographic diversity, against a backdrop of coal prices at historic highs and track record of successful delivery.’
Strong outlook for Whitehaven Coal
2019 is shaping to be another strong year for Whitehaven, with coal demand in Asia set to continue across both established and emerging markets.
Metallurgical coal sales represented 17% of total sales for the year. So investors should keep in mind next year’s guidance for saleable coal production is expected to be in range of 22.0Mt to 23.0Mt. Meaning costs for the year are likely to increase to $64/t, excluding royalties caused by higher fuel costs.
There’s also plans for Japan, Whitehaven’s largest thermal coal customer, to build up to 30 new ultra-super critical power stations as sub-critical generation capacity.
Mr Flynn left some good news for shareholdings, saying:
‘The strength of our future prospects is reflected in the Board’s decision to recommend a final dividend of 14 cents per share and a special dividend of 13 cents per share. This brings the total cash returned to loyal shareholders to $595 million in the space of 12 months.’
For Money Morning
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