COVID-19 eating into Stanmore's earnings

STANMORE Coal has revised its underlying earnings guidance for the full year FY2020 from $92-100 million to $80-85 million.
COVID-19 eating into Stanmore's earnings COVID-19 eating into Stanmore's earnings COVID-19 eating into Stanmore's earnings COVID-19 eating into Stanmore's earnings COVID-19 eating into Stanmore's earnings

Stanmore's production guidance for the full year remains on track at 2.35Mt.

The company attributed the downgrade to the unfolding impacts of COVID-19, which are expected to impact earnings in the June 2020 quarter.

"Term customers have advised Stanmore in the past week that they will be deferring taking delivery of contracted coal shipments that they were due to take in June until later in the year," it said.

"This will now cause a material deferral in revenue and earnings with no sales now forecast for June, being a reduction of around 250,000t of sales, which were previously expected."

Stanmore said reductions in coking coal prices were badly affected because of the COVID-19 crisis with hard coking coal prices falling from US$163.5 per tonne in mid-March, to $118.5/t as at April 24.

"As a result of fewer tonnes being sold as well as measures put in place by the company and its suppliers to manage the impacts of COVID-19, unit costs per tonne are expected to increase slightly above guidance of A$107/tonne sold, ex-royalty, to A$109/tonne sold," the company said.

Production guidance for the full year remains on track at 2.35Mt.