Stanmore Coal has flagged a reduction in its coal exports starting June, forcing the company to slash its earnings guidance for the 2020 financial year.
The 250,000 tonnes of sales are expected to be deferred until later in the year. There is now no sales forecast for June.
Stanmore anticipates its unit costs per tonne to increase accordingly, from $107 per tonne sold (ex-royalty) to $109 per tonne.
The company adjusted its underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) guidance from $92–$100 million to $80–$85 million for the current financial year.
Stanmore is also faced with a significant fall in coking coal prices, with Platts premium low-volatile (PLV) hard coking coal prices falling from $US163.5 ($251.2) per tonne in mid-March to $US118.5 per tonne as at April 24.
“Although this recent fall in prices is significant, it will not impact 2020 financial year underlying EBITDA materially, given the company sells largely on contract prices which are 50 per cent set for the June quarter,” Stanmore stated in an ASX announcement.
Stanmore’s production guidance remains on track at 2.35 million tonnes. The company operates the Isaac Plains complex in the Moranbah town of Queensland, which generates coking coal and thermal coal.
Earlier this month, Singapore-based Golden Investments made a takover offer for all of the shares in Stanmore that it did not already own or control.
Days later Golden Investments acquired more than 50 million Stanmore shares, giving the former a 51 per cent interest in the company.
Stanmore previously stated that the takeover offer represented a “compelling opportunity,” given the declining prices of Stanmore’s shares since July last year and the potential impact of coronavirus pandemic on global economies.
The offer from Golden Investments closes on May 18.