Whitehaven Coal (WHC) reckons it is looking at a better year in 2015-16 than the year just concluded after revealing a books cleaning writedown and loss for the 12 months to June.
Management says the company returned to the black in the 4th quarter and expects the trend to continue, despite continuing weak international coal prices.
Helping with the improvement is the sharp fall in the value of the Aussie dollar in the last year to 18 months.
The company posted an underlying loss of $10.7 million for the year to June, and a series of impairment write-downs pushed the net loss for the year to June to $342.7 million, against a $28.4 million net loss for the 2013-2014 year.
The impairments included a $355 million charge in relation to early stage exploration assets, and another of a $65 million charge relating to the repeal of the minerals resource rent tax.
Working against the company in 2014-15 was the slow ramp up of production from its Maules Creek coal mine in north western NSW. That helped net debt rise by $250.6 million to $936 million.
WHC 1Y – Brighter times ahead for Whitehaven?
Managing director Paul Flynn said the company had returned to profitability in the second half despite subdued global demand for coal.
“Whitehaven is positive about the long-term outlook for coal, and particularly the high quality coal being sought by countries that understand the crucial role it has to play in creating a lower emissions future," he said yesterday.
He said the financial results were a strong endorsement of the company’s product, performance and potential.
Whitehaven said underlying earnings rose 44% to $130.3 million thanks to cost cuts, increased production and sales volumes offsetting weakness in coal prices.
Weaker Chinese demand had caused coal prices to fall and further production cuts to metallurgical coal were required for the global market to rebalance, the company said.
The company did not declare a dividend.
Whitehaven shares eased 3.8% to $1 on the ASX yesterday.
