Whitehaven Coal (ASX:WHC) has joined rival Yancoal Australia in reporting a significant decline in revenue and earnings due to a global downturn in coal prices during the year ending June. Unlike Yancoal, which opted to conserve cash by suspending dividends, Whitehaven declared a smaller dividend after investing billions of dollars in two Queensland mines formerly owned by BHP and Mitsubishi.
In addition to its financial results, Whitehaven announced yesterday that it had sold a 30% stake in its newly acquired Blackwater mine to two Japanese steel mills for $1.08 billion, effectively reducing its net debt. The company's net debt at June 30 was $1.3 billion, and this sale is expected to put it in a strong net cash position by early 2025.
Whitehaven's revenue for the year was $3.82 billion, down 37% from $6.07 billion in the previous year. The company declared a final dividend of 13 Australian cents per share, bringing the total annual payout to 20 cents per share, down from 74 cents a year ago.
Full-year statutory net profit fell 87% to $355 million, missing consensus estimates of $767.3 million. Group EBITDA declined 80% to $798 million, primarily due to a significant drop in average realised coal prices from NSW operations.
Whitehaven described FY24 as a "pivotal year," during which it acquired the Daunia and Blackwater high-quality coking coal mines for over $3 billion. The sale of Blackwater stakes to Nippon Steel (30%) and JFE Steel (10%) is expected to settle in early 2025.
Whitehaven CEO Paul Flynn expressed satisfaction with the Blackwater deal, stating that the joint venture with high-quality participants validates the asset purchase and the company's plans as the operator of Blackwater. The proceeds from the sale will further strengthen Whitehaven's balance sheet and provide flexibility for future investments.
Whitehaven's shares rose 5.5% in afternoon trading.
