Whitehaven Coal has reported a 79 per cent decline in its earnings during the second half of last year on the prior corresponding period due to the pressures of low seaborne coal prices.
Whitehaven recorded an earnings before interest, taxes, depreciation and amortisation (EBITDA) of $37.2 million and a net loss of $94.5 million.
However, the company partially offset this by decreasing costs at its operations and increasing its sales volumes.
Using its business improvement program called Project Strive, Whitehaven aims to achieve greater consistency of operational performance for increased productivity and lower costs.
This has taken effect in the 2021 financial year, with Whitehaven estimating an achieved savings of 70 cents per tonne of coal.
The company anticipates this to rise to $2 per tonne within the next two years.
Despite Whitehaven not having direct exposure to China, the company stated Chinese restrictions on Australian coal imports did have an impact on the seaborne coal market, therefore its performance.
“The impacts of subdued pricing on seaborne coal markets were a key feature of the half-financial year results,” Whitehaven managing director and chief executive Paul Flynn said.
“The business responded strongly to these challenging market conditions through improvement measures that delivered meaningful cost reductions and greater efficiency, offsetting price headwinds to some extent.
“With future savings targets identified and coal markets rebalancing in response to demand signals, we are optimistic about achieving stronger outcomes through the second half.”
The company has been successful in renewing its metallurgical coal sales contracts and expects 2021 coal sales volumes to rebound to pre-COVID-19 levels.
Whitehaven’s equity run-of-mine (ROM) coal production for the half-year period was 28 per cent above the prior comparative period of 7.7 million tonnes.
Equity coal sales also rose mildly on the prior comparative period to 8.7 million tonnes, representing a 3 per cent increase.