The Yancoal Australia Ltd (ASX: YAL) share price is on watch this morning after the Aussie coal company reported solid production numbers but lower realised coal prices in its June quarter 2019 report.
What were the highlights from Yancoal's report?
For the quarter ended 30 June 2019, Yancoal reported run-of-mine (ROM) coal production of 17.1 megatonnes (mt), similar to Q2 2018 numbers, and saleable coal production up 6% year-on-year (YoY) to 13.4 mt.
The company also recorded 9.0 mt attributable saleable production, also up 6% YoY, with year-to-date attributable saleable coal production running 9% ahead of 2018.
Yancoal's largest production numbers continue to come from its Moolarben site, with Q2 2019 ROM production of 5.4 mt and saleable coal production of 4.8 mt, while its sales volumes continue to be dominated by thermal coal.
Thermal coal made up 6.7 mt of the 8.2 mt sold during the quarter, compared to metallurgical coal, which contributed just 1.5 mt in Q2 2019.
Yancoal management said the realised price for the quarter reflected regional market conditions for coal, with an average coal price in the June Quarter of $116 per tonne, down from $133 per tonne in March 2019.
In February 2019, Australian high energy thermal coal prices fell to a 19-month low and have continued to struggle since as Chinese import restrictions ate into profits early in the year, despite some recent resilience.
While the company did report a total recordable injury frequency rate of 7.17, up from 7.12 in the previous quarter, broadly speaking the results were positive for the group.
What about FY19 guidance numbers?
In terms of guidance, the group's after-market update reported no significant changes for the full-year results expected in August 2019.
Yancoal continues to expect 35 mt of attributable saleable coal production with free on board (FOB) operating costs (excluding royalties) of $62.50 per tonne.
The Aussie coal company is also forecasting $285 million of capital expenditure for the year, an increase on the $210 million recorded in FY18.
The Yancoal share price (amongst other coal miners) has struggled in 2019 with the lower Aussie coal prices and is currently trading 15% lower since the start of the year at $3.23 per share – well shy of its 52-week high of $5.08.
