Whitehaven Coal has struggled against low coal prices during the 2020 financial year, with a decrease in revenue of 31 per cent compared with last year.
The company’s earnings reflected softening of Newcastle thermal coal prices and the impact on run of mine production due to labour shortages and dust issues at the Maules Creek mine in New South Wales.
Whitehaven also required a longwall change out at the Narrabri mine, also in New South Wales which caused eight weeks of disturbance to operations.
COVID-19 had a profound impact on both thermal and metallurgical coal markets, due to the lockdown of Asian economies including China and India and historically low prices from United States, Canadian and Colombian exporters and more recently, from Australian and Indonesian producers.
The short-term outlook for thermal and metallurgical coal is dependent on post-pandemic economy and industrial recovery, which has so far had positive signs in Australia with the resumption of term contract shipping schedules.
Whitehaven managing director and chief executive officer Paul Flynn said despite these difficulties having an impact on the company, he is confident about the continuing demand for high quality coal.
He is however still cautious of short-term economic uncertainty, as Whitehaven eyes future projects such as the recently approved Vickery extension project in New South Wales.
“Significant contraction in coal prices disproportionately impacted our headline financial results but it was pleasing to be able to reward investors and pay out $312 million in dividends through the period,” Flynn said
“The New South Wales Government’s recent approval of Vickery was a significant achievement but given continuing short-term economic uncertainty we remain cautious about expansion.
“We are confident about the continuing demand for high quality coal in a more carbon conscious world and the major role it will play as part of the global economic recovery.”