At the time of writing, Whitehaven Coal Limited [ASX:WHC] shares are trading at $4.77, marking a staggering 5.17% spike from yesterday’s trading price.
Whitehaven Coal is Australia’s largest independent coal producer and is north west New South Wales’ leading coal producer.
Today, the company released their quarterly report for the end of 2018 and have since been riding on the wave of support generated by their record-breaking results.
Whitehaven’s Impressive quarterly results
The report revealed an astounding run-of-mine (ROM) coal production figure of almost 7.4 million tonnes for the quarter ending December 2018. That’s a whopping 26% increase from the ROM coal production 12 months previous, at just under 5.5 million tonnes.
Saleable coal is also up 11% from the amount at the end of 2017.
Total coal sales are sitting at 10.3 million tonnes for the first half of the 2018 financial year, which puts Whitehaven ‘firmly on track to meet full year production guidance’ of 22–23 million tonnes, says MD and CEO Paul Flynn.
Flynn also noted that their Maules Creek and Narrabri mines ‘have done a lot of the heavy lifting for Q2’. Maules Creek hit a record ROM coal production of 4 million tonnes. As for Narrabri, ROM coal production was up a promising 42% from the 2017 corresponding period.
Whitehaven also reported on ‘560 public submissions received in relation to the Vickery Extension Project, with 63% support of the project proceeding’. Such an extension to open cut mining operations will provide new jobs, greater local investment and a more sustainable local economy for North West NSW.
What this means for Whitehaven share price
The quarterly report also included Whitehaven’s coal outlook, which revealed the potential negative volatility of the resource, particularly regarding thermal coal:
‘Despite strong prices for quality coal, there has been limited supply side response. In Australia, a number of producers including Whitehaven have diverted production…to thermal coal but new incremental capacity has not emerged.’
Despite this current road block, Whitehaven have reason to trust their move to thermal coal:
‘With the winter season in the northern hemisphere and limited new supply available, the short term outlook for high quality thermal coal remains positive.’
Of course, none of this is guaranteed, which Whitehaven also point out:
‘Further into the future, prices for high quality thermal coal remain dependent upon…the rate of industrialisation, urbanisation and electrification of Asian economies.’
And such a variable is yet to quantifiable, what the current dramatic shift that major Asian economies like China are currently undertaking.
For Money Morning
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