Maules Creek drives Whithaven’s return to profit

Australian coal company, Whitehaven Coal, has reported a return to profit for the financial year to 30 June 2016 (FY2016), as the company benefitted from the ramp up of its Maules Creek mine to commercial production.

Whitehaven made AUS$20.5 million on revenue of AUS$1.2 billion in FY2016. The previous year, the company had made a loss of AUS$342.7 million on revenues of AUS$763.3 million.

The ramp up of the company’s Maules Creek mine to commercial production drove the return to profitability, underpinning the 55% increase in ROM coal production to 15.8 million t.

In additional to boosting production volumes, Maules Creek benefits from lower unit costs and higher-quality coal, helping to reduce average unit costs and boost the amount of metallurgical coal in Whitehaven’s product mix.

The company continued to drive down costs at its Narrabri and Gunnedah operations with the combination of efforts reducing overall FOB costs per tonne to AUS$56 in FY2016 – a fall of 8% from ASU$61 per tonne in FY2015.

“Our successful introduction of further cost reductions means out business model can operate profitably at lower price levels and that the business is resilient to cyclical pressure on price and demand,” said Whitehaven Managing Director and CEO, Paul Flynn.

Meanwhile, the higher quality of Maules Creek thermal coal helped support realised thermal coal prices with Maules Creek coal typically achieving substantial quality and CV uplifts over the GlobalCoal Newcastle Index price.

“The high-quality coal we are producing delivers higher yield and lower emissions and is in growing demand from Asia’s new generation of power plants, which are far more efficient and produce lower emissions that those in Australia,” Flynn added.

“Whitehaven is positive about the medium and long-term outlook for coal, particularly the outlook for the high-quality coal we produce.”

Maules Creek produced 7.3 million t of saleable coal in FY2016, a 231% increase on the previous year’s total of 2.2 million t.Saleable coal production was also up 1% at Narrabri, despite an 11% fall in ROM coal production, as the company ran down its stockpiled coal. Saleable coal production was down 2% at the company’s Gunnedah operations at 5 million t.

Edited by Jonathan Rowland.

Read the article online at: https://www.worldcoal.com/coal/18082016/maules-creek-drives-whithavens-return-to-profit-2016-2262/