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Whitehaven Coal Updated FY20 Guidance

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Whitehaven Coal (ASX: WHC) is the largest independent coal producer and the leading coal producer in New South Wales (NSW). Whitehaven currently operate five mines in North West NSW; four open cut mines at Maules Creek, Tarrawonga, Werris Creek and Sunnyside and one underground mine at Narrabri. Whitehaven has a market capitalisation of A$3.1 billion.

What are the recent updates in Whitehaven FY20 Guidance?

  • Total Managed ROM Coal Production range for FY20 is 20.0 – 22.0 Mt (previous range is 22.0 – 23.5 Mt).
  • Managed Coal Sales range for FY20 is 19.0 – 20.0 Mt (previous range is 20.0 – 21.0 Mt).

What is the driver of this development?

The main driver of this lower guidance is due to issues at Whitehaven’s Maules Creek operation (Whitehaven largest operation). This operation Managed ROM Coal Production range has been reduced to 10.0 – 11.00 Mt (previously 12.0 – 12.5 Mt). The cause of this reduction is attributed to skilled labour shortages and impacts arising from dust events related to severe and ongoing drought conditions in NSW.

These disruptions are expected to continue further into the summer. However, these issues are temporary and are expected to pass as FY21 approaches.

What is the market reaction?

The market reaction to Whitehaven’s announcement is negative. Whitehaven share price is down 8% and is currently trading at A$2.75.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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