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The Whitehaven Coal Ltd (ASX:WHC) share price falls on weak quarterly results

The latest quarterly production report from Whitehaven Coal Ltd (ASX: WHC) prompted a mixed reaction on the market on Monday. The stock posted a 3% gain in morning trade, before heading downwards to $5.52, 1.5% below yesterday’s closing price.

The report includes some good news and some bad news, perhaps not enough to push the share price further up after it has almost doubled in the past 12 months.

Whitehaven sold 4,700 M/tonnes of coal in the June 2018 quarter, a 13% decrease from the previous corresponding period. The company blames a weather-related port congestion in Newcastle, but the sales slippage also mirrors a corresponding decline in production.

However, year-to-date sales are still 7% above the volumes recorded in 2017 and production in the whole of FY18 is within the company’s guidance.

The company benefitted from strong coal prices in the first half of 2018. Thermal coal demand from Asia, particularly from China, was well supported by a cold winter and strong industrial demand. Buoying steel prices contributed to the demand for metallurgical coal.

The company expects prices to remain strong in the next year, particularly if the ongoing dispute between Queensland regulators and Aurizon Holdings Ltd (ASX: AZJ) continues to hamper coal miners’ access to railways.

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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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