Why we’re watching the Whitehaven Coal (ASX:WHC) share price today

The Whitehave coal share price is on our radar today following release of the company’s HYFY21 results. Here’s what we learned.

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We’re watching the Whitehaven Coal Ltd (ASX: WHC) share price this morning following the release of the company’s half-year FY21 results. Over the previous 12-month period, the Whitehaven Coal share price sank over 36%.

Let’s take a look at the announcement to assess what it might mean for share prices. 

What will today’s results mean for the Whitehaven Coal share price?

Whitehaven Coal reported a half-yearly loss for FY21. This was due to the coronavirus pandemic rattling coal prices.

Consequently, the company posted a net loss after tax of $94.5 million for the six-month period. This is significant, compared to a profit of $27.4 million in the prior corresponding period (pcp). It is worth noting that the loss exceeds the UBS estimate of an interim loss of $53 million.

Whitehaven Coal revenue took a 21% hit to land at $699.3 million compared to $885.1 million in the pcp. Earnings before interest, tax, depreciation and amortisation (EBITDA) flopped 79% from $177.3 million to $37.2 million. Considering FY21 half-yearly earnings, the Board determined an interim dividend will not be declared.

However, the Whitehaven Coal share price has clawed up 20% over the previous six months. The company has reported $411.8 million of available liquidity.

CEO comments on Whitehaven Coal results

Whitehaven Managing Director and CEO, Paul Flynn, said this about the H1FY21 results:

The impacts of subdued pricing on seaborne coal markets were a key feature of H1 results as COVID-19 impacts on economic and industrial activity continued to be felt.

The business responded strongly to these challenging market conditions, including through improvement measures that delivered meaningful cost reductions and greater operational efficiency, offsetting price headwinds to some extent.

We have closed out H1 FY21 with strong levels of liquidity, strong banking support and we are focused on retiring debt against the backdrop of the improving price environment.

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.

Moving Forward

Year-to-date, the Whitehaven coal share price has dropped 3.65%. With this in mind, it will be interesting to see how today’s announcement will impact Whitehaven’s share prices. 

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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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