Whitehaven Coal Ltd (ASX: WHC) shares are tumbling this morning after the company downgraded its production guidance. At the time of writing, the Whitehaven share price is trading at $1.84 – 9.8% lower than yesterday’s close.
Today’s downgrade marks the fourth time Whitehaven has lowered its 2021 financial year production guidance.
Let’s look at the coal mining company’s latest announcement.
Downgraded production guidance
Whitehaven shares are well in the red today after the company downgraded its production guidance for the 2021 financial year to 20.4 million tonnes of coal.
Within its full-year results, released in August 2020, Whitehaven gave production guidance of between 21 and 22.8 million tonnes for the 2021 financial year.
According to Whitehaven, the latest downgrade has been led by less production at the company’s Narrabri underground mine.
Whitehaven states the Narrabri mine is undergoing engineering works and has experienced a geological event. The company is conducting geo-sensing drilling at the mine to provide confidence in the geological conditions.
Originally, Whitehaven claimed the Narrabri mine would produce between 6 and 6.7 million tonnes of coal this financial year. The company now expects the mine to produce 4.1 million tonnes in FY21.
In its full-year results, the company claimed it expected managed coal sales of between 18.5 and 20 million tonnes.
Today, Whitehaven announced its managed coal sales will likely be around 17.9 million tonnes.
However, Whitehaven’s Maules Creek and Gunnedah Open Cut mines are still as productive as previously expected.
The Maules Creek mine is now expected to produce 12.5 million tonnes of coal this financial year – 0.5 million tonnes more than its original guidance.
The Gunnedah Open Cut mine’s production is within the range of the previous guidance. Whitehaven expects it to produce 3.8 million tonnes of coal for FY21.
The company’s unit cost guidance has also continued as predicted – $74 per tonne.
Whitehaven share price snapshot
Whitehaven shares have had a good run on the ASX lately, spurred by the gaining price of coal.
Currently, the Whitehaven share price has gained around 12% year to date. It has also gained almost 13% since this time last year.
The company has a market capitalisation of around $1.9 billion, with approximately 1 billion shares outstanding.