Whitehaven Coal shares have jumped as the miner posted a near-30 per cent hike in full-year profit and signalled it expects continuing strong demand from coal-hungry Asian energy generators.
Improved volumes and high prices for premium thermal coal lifted Whitehaven’s profit for the year to June 30 by 29.7 per cent to $525.6 million.
Revenue for the year was up 27.3 per cent to $2.26 billion.
Shares in the miner rose by up to seven per cent during morning trading on Tuesday before slipping back, to be 3.5 per cent higher at $5.44 at 1317 AEST.
Whitehaven reported a seven per cent increase in production to 22.9 million tonnes for the year while thermal coal prices lifted, with the company saying prices hit a six-year-high in recent weeks.
The demand outlook for coal remains strong, Whitehaven said, citing a near-nine per cent increase in total power generation in China in the year to May that has drawn increased coal imports.
Malaysia, Vietnam and Philippines have also increased coal imports as domestic gas production runs down, Whitehaven said.
The NSW-based exporter said new demand could come from Pakistan and Bangladesh, which are deploying new ultra-supercritical coal-fired power plants.
The higher prices and demand have coincided with supply constraints from many exporters, with the US and Indonesia the only producers having responded to the recent improvements in the market.
Whitehaven managing director Paul Flynn said he expects prices of thermal coal to remain high.
“FY19 is shaping up as another strong year for the company with the outlook for coal demand in Asia set to remain strong across both established and emerging markets,” he said in a statement.
“Japan, Whitehaven’s largest thermal coal customer, has plans to build up to 30 new ultra super critical power stations as sub-critical generation capacity is retired.”
The company said it had received an average price of $US130 a tonne for its coal during the year, up from $112 per tonne in the previous year.
As a result, its average earnings margin rose to $A59 per tonne in 2018/19, from $A46 a tonne in the previous year.
The company has flagged coal production in 2018/19 to be in the range of 22 to 23 million tonnes, similar to last year’s output.
WHITEHAVEN FY PROFIT JUMPS
*Net profit up 29.7pct to $525.6 million
*Revenue up 27.3pct to $2.26 billion
*Final dividend of 14 cents and special dividend of 13 cents, unfranked