- Record H1 FY23 result, solid Narrabri performance, weather-affected open cut mines, and a stronger balance sheet
According to the company’s website news release on February 16, 2023, Whitehaven Coal (ASX:WHC) has reported a record half year net profit after tax (NPAT) of $1.8 billion for the six months ended 31 December 2022, and earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.7 billion, which is a significant increase on the $0.6 billion of EBITDA in the first half last year.
Whitehaven’s H1 FY23 results highlights also include:
• A 15% year on year improvement in safety performance as measured by a total recordable injury frequency rate (TRIFR) of 5.2 for the 12 months to 31 December
• Run-of-mine (ROM) managed production of 8.8M tonnes, compared with 8.4M in the first half last year
• Record revenue of $3.8 billion underpinned by an achieved average coal price of A$552/t (compared with $1.4 billion revenue and A$202/t average price in the first half last year)
• Cash generated from operations of $2.5 billion compared with $567.4 million in the first half last year.
Whitehaven held $2.5 billion of net cash¹ on the balance sheet as at 31 December 2022 ($1.0 billion of net cash at 30 June 2022).
A fully franked interim dividend of 32 cents per share will be paid on 10 March 2023.
During the half year, 67.0 million shares (~7% of issued share capital) were bought back for an investment of $592.8 million, with 40.1 million shares and $367.4 million being in relation to the Stage 2 FY23 share buy-back approved by shareholders in October 2022.
Total capital returned through the Stage 2 share buy-back for the half year and the interim dividend is $641.4 million, representing a total payout ratio of 36% of H1 FY23 NPAT, which is consistent with Company policy.
Commenting on market conditions and Whitehaven’s first half FY23 results, Paul Flynn, CEO & Managing Director said:
“In the first half of FY23, global energy shortages continued to underpin strong pricing. Weather related production constraints in New South Wales contributed to tight supply.
“Prices for high quality, high-CV coal held at very high levels during the half year and our customers remain focused on energy security as a key priority. We achieved a record realised average price of A$552 per tonne in the half year, a 173% increase on the same period last year.
“Despite weather interruptions and ongoing labour constraints, the business performed well operationally. Our Narrabri underground mine delivered a strong operational performance and our safety results continued to improve with a rolling 12 month recordable injury frequency rate of 5.2 representing a 15% year on year improvement.
“With Whitehaven’s half year NPAT of $1.8 billion, and strong operating cash flows, we are retaining cash on our balance sheet for future optionality. At the same time, we are returning surplus capital to shareholders through fully franked dividends and share buy-backs.”
Commenting on the market outlook and guidance, Mr Flynn added:
“Demand for high-quality seaborne thermal coal remains strong and while we have seen some cyclical price softening moving into the second half of the year, we expect that high-CV coal prices will continue to be well supported throughout CY23.
“We are focused on maximising margins and meeting production and sales guidance for FY23. At the same time, we are progressing plans for our Vickery and Winchester South development projects, including completing our assessment of a staged approach of the Vickery development to bring on smaller volumes sooner to help meet the strong demand.”
