Narrabri performance helps drive Whitehaven's earnings

RECORD production from Whitehaven Coal’s Narrabri longwall mine in New South Wales, combined with improvements at the open cut mines continued the trend of declining costs achieved since early 2013 and helped the company report a 44% higher EBITDA figure for the financial year of $130.3 million.
Narrabri performance helps drive Whitehaven's earnings Narrabri performance helps drive Whitehaven's earnings Narrabri performance helps drive Whitehaven's earnings Narrabri performance helps drive Whitehaven's earnings Narrabri performance helps drive Whitehaven's earnings

The shearer at Whitehaven Coal's Narrabri longwall mine in New South Wales.

Lou Caruana

Narrabri’s saleable coal production (equity) of 5.0 million tonnes was 1.3Mt or 37% above production in FY2014.

Whitehaven’s fully absorbed costs fell by 12% to average $61 per tonne excluding royalties for the year and the return to profit of $1.7 million during the second half of the year.

This is the first profit recorded by the company in three years and reflects Whitehaven’s performance in managing its costs in a more subdued pricing environment, its CEO and managing director Paul Flynn said.

“The fact that Whitehaven has delivered on its commitments, and achieved a modest return to profitability in the second half despite subdued global demand is a strong endorsement of our product, performance and potential,” he said.

Narrabri is becoming one of the most productive longwall underground mines in Australia establishing several new production records.

First coal was railed from Whitehaven Maules Creek project also in NSW three months ahead of the original schedule and mine declared commercial from 1 July 2015.

Maules Creek was declared commercial on 1 July 2015 and is set to become a major contributor to the company as production ramps up to its full 13Mtpa ROM coal capacity over the next three years, Flynn said.

“On almost any measure Maules Creek is an extraordinary achievement in current circumstances and the mine is now poised to help underpin Whitehaven’s value proposition over its 30-year mine life,” he said.

“Our performance on project delivery, production and costs should give investors who have stuck with us through the harder times real confidence about the upside potential Whitehaven offers.”

Whitehaven reported a full year loss after tax and significant items of $342.7 million. The most significant component of this loss relates to an impairment arising from the revised valuation of early stage exploration assets brought into the group as part of Whitehaven’s merger with Aston Resources – based on continuing subdued market conditions.

“This is a prudent albeit relatively significant piece of housekeeping which reflects our judgement that capturing the value of these assets is now a longer term proposition,” Flynn said.

Whitehaven’s total coal resources have increased by 182Mt or 4.7% from 3855Mt in August 2014 to 4037Mt in August 2015.

topics

loader