Coronado share price brings the energy amid the best quarter in its history

A record-setting quarter for this metallurgical coal producer…

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Key points

  • The Coronado Global Resources share price is up more than 3% in afternoon trade
  • Amid record coal prices, Coronado pulled in its highest quarterly revenue to date at US$947 million
  • The company expects another strong quarter ahead as geopolitically tensions provide further tailwinds

The Coronado Global Resources Inc (ASX: CRN) share price is gaining momentum today following its quarterly report.

Ticking past midday, the Australian metallurgical coal producer’s shares are pushing 3.7% higher to $2.22. As a result, the company’s share price is now only 7% away from its recent 52-week high.

Let’s dive into the latest quarterly report from Coronado.

Coronado share price heats up on record quarter

Highlights for the period ending 31 March 2022 include:

  • Record quarterly revenue of US$947 million, up 22.3% from the December quarter
  • Group run-of-mine production of 6.7 million tonnes, increasing 5% from the prior quarter
  • Saleable production of 4.2 million tonnes, up 3.5% from the prior quarter
  • Record quarterly realised metallurgical coal price of US$267 per tonne
  • Mining cost per tonne for the March quarter of US$76.3 per tonne
  • Closing net cash position at the end of the quarter of US$257 million

What else happened during the quarter?

As the Coronado share price suggests today, it was a strong three-month period for the coal producer. The combination of record coal prices and a sustained production level helped Coronado achieve its highest revenue in a quarter to date.

According to the report, the Russia/Ukraine conflict provided a tailwind for the company. Disruptions to Russia’s coal supply have boosted demand across the board. In addition, steel production in China recovered swiftly during the quarter after the lifting of restrictions imposed during the Winter Olympics.

Another positive for the Coronado share price, the company is initiating a fixed dividend to shareholders in light of its strong financial position. This dividend is expected to be paid biannually, providing US 0.5 cents per CDI to investors.

What did management say?

Reminiscing on the past quarter, Coronado CEO Gerry Spindler wrote:

The first quarter of 2022 was a quarter marked by a series of records for Coronado. We achieved record safety results in our US operations, record Group revenues, record realised pricing and record liquidity.

In addition, Coronado completed the first quarter with higher ROM production, higher saleable production, and higher sales volumes than the prior quarter.

Spindler added:

Coronado was one of the first pure-play coal operators in the world to return to a net cash position following the impacts of COVID-19 and lower price cycle. Our balance sheet is strong, and we are delivering on our capital management plans as promised.

What’s next?

Today’s Coronado share price rally might not solely be a product of its past performance. Adding to the optimism, the company highlighted the positive future outlook for the coal market.

While coal prices have fallen from their mid-March highs, they have managed to hold steady at a level still twice as high as historical averages. Notably, Coronado is witnessing elevated interest from new European customers amid concerns Russia will cut its gas supply.

Coronado share price snapshot

Investors would be hard-pressed to find an ASX share that has performed better than the Coronado share price over the last year.

While the S&P/ASX 200 Index (ASX: XJO) has returned a mediocre 3.5%, the coal producer is up 270%. Once accounted for dividends, the total return figure goes north of 300%.

Motley Fool contributor Mitchell Lawler 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.

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