Whitehaven Coal has signalled a revival of regular dividends after delivering another sharp increase in profit on the back of improved volumes and stronger coal prices.
The east coast miner reported a 63 per cent increase in half-year net profit to $257.2 million.
Revenue for the six months to December 31 was 39 per cent higher at $1.15 billion.
It’s board declared an unfranked interim dividend of 13 cents a share, only the second shareholder payout since the miner first announced a 20 cents a share dividend-cum-capital return in August after a drought of more than four years.
Chief executive Paul Flynn indicated dividends would be a more regular feature.
“Now that our major capital program is behind us it is pleasing to reward shareholders with an interim dividend,” he said on an investor call.
“The dividend points to the confidence that Whitehaven’s board has in the future prospects of the company.”
Whitehaven, which operates five coal projects in NSW, has benefited from strong demand from countries such as Japan, China, South Korea and India, where its thermal coal is used in new-generation high-energy-low-emissions (HELE) coal-fired power plants, and its metallurgical coal is sought for steelmaking.
“We continue to see strong interest from potential new customers throughout Asia,” Mr Flynn said.
“Many are seeking Whitehaven’s high-quality coal for their power stations and steel mills – either planned, under-construction or newly built.”
The company said it had received an average price of $124 a tonne for its coal during the six months, up from $106 per tonne in the same period last year.
As a result, its average earnings margin jumped 32 per cent to $54 per tonne in the half-year.
Whitehaven in January said output for the half-year had risen seven per cent to 10.9 million tonnes, thanks to strength from its mines in the Gunnedah coal basin in northeastern NSW.
However, lower production at its lowest-cost Narrabri mine had led the company to cut its production guidance for the full-year to between 20.5 and 21 million tonnes, from the previous range of 22-23 million tonnes.
It reaffirmed that lower guidance on Friday and also confirmed that operating costs at Narrabri would increase by $2 per tonne.
That appeared to dampen the markets response to the results, with Whitehaven shares sliding 4.1 per cent to $4.47 by 1430 AEDT.
WHITEHAVEN’S HALF-YEAR PROFIT PILES UP
* Net profit up 63pct at $257.2m
* Revenue up 39pct to $1.15b.
* Unfranked interm dividend of 13 cents vs NIL