Leading Australian Gunnedah Basin coal miner Whitehaven Coal has posted an operating loss of AUD 87.3 million for the 2020-21 financial year. Whitehaven Coal MD & CEO Mr Paul Flynn said “FY21 was very much a year of highs and lows both operationally and in terms of factors outside our control. In the reporting period cyclical lows in coal price were replaced with record highs, with the gC NEWC index currently trading around of USDS 170 per tonne. While we had our hands full putting the more difficult geological conditions at Narrabri behind us. we also saw our largest production asset. Maules Creek, achieve record annual ROM production of 12.7Mt. Amid contending with port and logistics disruption. COVID-19 and other challenges, the team has done a great job containing costs and navigating highly dynamic market conditions. Today, the outlook is better than we have seen for some time, with the strong price environment putting us on an accelerated timeline to de-leveraging the balance sheet and returning cash to shareholders. We re optimistic about the continuing demand for our high-quality product in a more carbon conscious world."FINANCIAL HEADLINESNet loss after tax before significant items of AUD 87.3 millionEBITDA of AUD 204.5 million, a decrease of 33%, reflecting the strengthening of the Australian dollar compared to the previous year and the impact of geological challenges at Narrabri on both production and coal qualityUnit costs decreased 1 % to AUD 74 per tonne, versus pep of AUD75OPERATING HEADLINESEquity ROM coal production for FY21 was 16.5Mt, in line with pep, with Maules Creek record annual production offsetting reduced Narrabri production due to geological challenges encountered in Q2 FY21.Equity coal sales, including purchased coal, were 16.4Mt, 3% below pep, reflecting the decrease in purchased coal.Equity metallurgical coal sales were 15% of total FY21 own coal sales, compared to 17% pep.COAL MARKET OUTLOOKCoal prices across both metallurgical and thermal segments have increased significantly from the lows experienced in mid-2020. The gc NEWC Index has more than tripled from the low of US$48/t in August 2020, to approximately US$170/t in August 2021, while the APIS index is approaching its all-time high at ~US$97/t. Spreads between gc NEWC and APIS indices have exceeded the record high of ~US$65/t in August 2021. Tendering from Asia-based customers remains active with increasing interest by customers to secure coal for CY22. Similarly, the PLV HCC Index has more than doubled from lows of US$101/t in December 2020, and lifted other components of the metallurgical coal complex. Semi-Soft coking coal has recovered to US$152/t however, at this level, sale of high CV thermal coal remains a more attractive option.Availability of high-CV thermal remains tight due to the strong demand from end users and coal producers / traders for coal blending with lower CV coal. Strong China coal demand, supported by increased economic activity and challenges in expanding domestic China coal production, compounded by China’s ban on Australian coal have modified coal flows in the seaborne market and elevated seaborne coal prices to record levels.On the supply side, there have been numerous disruptions recently. Indonesia has experienced heavy rainfall and equipment availability issues affecting production. Rail and other logistical issues have impacted Russian and South African exports while Colombia has faced industrial action at Cerrejon in addition to the closure of Prodeco. Wildfires have also interrupted supply out of Canada and the USA and Australian supply has experienced weather events and logistics issues such as the outage of the NCIG shiploader.All high quality, high-CV thermal coal supply remains tight; prices are forecast to remain strong through CY21, CY22 and CY23.
Leading Australian Gunnedah Basin coal miner Whitehaven Coal has posted an operating loss of AUD 87.3 million for the 2020-21 financial year. Whitehaven Coal MD & CEO Mr Paul Flynn said “FY21 was very much a year of highs and lows both operationally and in terms of factors outside our control. In the reporting period cyclical lows in coal price were replaced with record highs, with the gC NEWC index currently trading around of USDS 170 per tonne. While we had our hands full putting the more difficult geological conditions at Narrabri behind us. we also saw our largest production asset. Maules Creek, achieve record annual ROM production of 12.7Mt. Amid contending with port and logistics disruption. COVID-19 and other challenges, the team has done a great job containing costs and navigating highly dynamic market conditions. Today, the outlook is better than we have seen for some time, with the strong price environment putting us on an accelerated timeline to de-leveraging the balance sheet and returning cash to shareholders. We re optimistic about the continuing demand for our high-quality product in a more carbon conscious world."FINANCIAL HEADLINESNet loss after tax before significant items of AUD 87.3 millionEBITDA of AUD 204.5 million, a decrease of 33%, reflecting the strengthening of the Australian dollar compared to the previous year and the impact of geological challenges at Narrabri on both production and coal qualityUnit costs decreased 1 % to AUD 74 per tonne, versus pep of AUD75OPERATING HEADLINESEquity ROM coal production for FY21 was 16.5Mt, in line with pep, with Maules Creek record annual production offsetting reduced Narrabri production due to geological challenges encountered in Q2 FY21.Equity coal sales, including purchased coal, were 16.4Mt, 3% below pep, reflecting the decrease in purchased coal.Equity metallurgical coal sales were 15% of total FY21 own coal sales, compared to 17% pep.COAL MARKET OUTLOOKCoal prices across both metallurgical and thermal segments have increased significantly from the lows experienced in mid-2020. The gc NEWC Index has more than tripled from the low of US$48/t in August 2020, to approximately US$170/t in August 2021, while the APIS index is approaching its all-time high at ~US$97/t. Spreads between gc NEWC and APIS indices have exceeded the record high of ~US$65/t in August 2021. Tendering from Asia-based customers remains active with increasing interest by customers to secure coal for CY22. Similarly, the PLV HCC Index has more than doubled from lows of US$101/t in December 2020, and lifted other components of the metallurgical coal complex. Semi-Soft coking coal has recovered to US$152/t however, at this level, sale of high CV thermal coal remains a more attractive option.Availability of high-CV thermal remains tight due to the strong demand from end users and coal producers / traders for coal blending with lower CV coal. Strong China coal demand, supported by increased economic activity and challenges in expanding domestic China coal production, compounded by China’s ban on Australian coal have modified coal flows in the seaborne market and elevated seaborne coal prices to record levels.On the supply side, there have been numerous disruptions recently. Indonesia has experienced heavy rainfall and equipment availability issues affecting production. Rail and other logistical issues have impacted Russian and South African exports while Colombia has faced industrial action at Cerrejon in addition to the closure of Prodeco. Wildfires have also interrupted supply out of Canada and the USA and Australian supply has experienced weather events and logistics issues such as the outage of the NCIG shiploader.All high quality, high-CV thermal coal supply remains tight; prices are forecast to remain strong through CY21, CY22 and CY23.
