Another record: Whitehaven (ASX:WHC) share price sinks 6% despite NPAT soaring to new heights

Whitehaven shares have started the day poorly despite the company reporting a record NPAT.

| More on:
A young man stands facing the camera and scratching his head with the other hand held upwards wondering if he should buy Whitehaven Coal shares

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Whitehaven Coal reported its half-yearly results today, with another record set 
  • The company saw record operating earnings and declared an 8 cents/share interim dividend
  • In the last 12 months, the Whitehaven share price has jumped 90%

Shares in coal operator Whitehaven Coal Ltd (ASX:WHC) are falling this morning, down 6.5% to $2.87 following the release of the company's half-yearly results.

Whitehaven share price softens despite record profitability

The six months ending 31 December 2021 were hallmarked by several investment highlights, including:

  • Record first-half year EBITDA of $632.6 million and net profit after tax (NPAT) of $340.5 million
  • Average achieved coal price for H1 FY22 of A$202/tonne
  • Cash generated from operations of $567.4 million
  • EBITDA margin of 55% on own coal sales (A$102/tonne versus A$5/tonne last year)
  • Net debt of $403.4m as at 31 December 2021, which is 50% lower than at 30 June 2021
  • Board has declared an interim unfranked dividend of 8 cents per share
  • Board will undertake an on-market share buyback program of up to 10% of issued shares, capped at $400m
  • FY22 guidance remains unchanged.

What else happened this half for Whitehaven?

It was an all-green year for Whitehaven and its profitability. Revenue grew 106% year on year (YoY) to $1.44 billion, and operating leverage enabled a record EBITDA of $632 million – up 1,600% YoY.

This carried through to another NPAT record and a 934% leap in cash from operations from the year prior.

Whitehaven notes it is on track to repay in full its senior bank facility shortly. It will be in a positive net cash position in March 2022 at its current run rate.

Gearing was subsequently reduced by 48% but this was offset by a 19% increase in the realised unit cost to $83/tonne.

Investors might recall the company agreed to acquire the 1% Private Royalty over the Narrabri Coal mine from Anglo Pacific Group plc.

Whitehaven said: "The consideration of US$26.6 million, plus contingent revenue participation payments, is payable over five years to 31 December 2026. During the half, the company made the first payment US$4.4 million".

Management commentary

Speaking on the announcement, Whitehaven CEO Paul Flynn said:

High prices for thermal coal have driven record half year earnings and cash flows. Our rate of cash generation means debt is now all but paid down and affords considerable flexibility in regards to capital management. The Board's decision to restart dividends and implement an on-market share buyback delivers value for our shareholders both today, and over the longer term. In a world where access to reliable and affordable energy is more important than ever, our investment thesis is a compelling one.

What's next for Whitehaven?

According to Whitehaven: "The ongoing energy shortage is reflected in the prices being offered for spot physical gC NEWC coal deliveries where prices are approaching US$300/tonne in the first quarter of CY22".

As such, the company expects demand for seaborne thermal coal to "remain strong in CY22 and the supply side response to those high prices to remain muted".

"Coal prices are expected to be well supported over CY22", Whitehaven concluded.

Whitehaven share price snapshot

In the last 12 months, the Whitehaven share price has jumped 90% and is up 8% this year to date.

The share price is gaining considerable support in February and is up 11.5% for the month already.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »