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Yancoal stays the course

coal

Yancoal has closed out the March quarter with strong sales and a flush of cash in the bank thanks to strong production at its coal operations across Australia.

Coal production hit 14 million tonnes (Mt) for Yancoal in the March quarter, with 8.3Mt in attributable coal sales, a 47 per cent boost on the same period of 2023.

The company also welcomed an $180 per tonne (/t) average realised coal price and a $260 million increase in cash holding.

“Yancoal continues to generate robust cash inflows. The $180/t price realised was roughly double the cash operating cost we are targeting this year,” Yancoal chief executive officer David Moult said.

“The production rate in the first quarter sees us tracking at the low end of the guidance range, in line with our previous advice that production was expected to be weighted towards the second half of the year. We anticipate higher output in future periods.

“The company retains a strong financial position. We held $1.66 billion in cash at the end of March.”

Moult reflected on the current market, emphasising a strong and steady coal sector amid changeable conditions.

“Thermal coal markets faced a combination of weak demand due to a warm northern hemisphere winter and a soft global economy, and strong supply due to recoveries in exports from Australia, Indonesia, and other regions,” Moult said.

“The fact coal indices have not sharply declined under these adverse conditions suggests thermal coal markets remain relatively balanced.”

Looking ahead, Moult is confident Yancoal is in a position to grow over the coming year.

“We see Yancoal’s large-scale, low-cost coal production profile as well suited to the current coal market conditions. Having no interest-bearing loans, a large net cash position and robust operating margins provides us with the capacity to act should suitable growth opportunities arise.”

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