The Whitehaven Coal Ltd (ASX: WHC) share price is in the green this morning on the release of the coal miner's quarterly production report.
The S&P/ASX 200 Index (ASX: XJO) stock is up 0.72% at $7.02 in early trade on Friday.
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Whitehaven share price rises as production falls 12%
Here are the key takeaways from the coal miner's production over the three months ended 31 March:
- Run-of-mine (ROM) production fell 12% quarter-on-quarter to 4.3 million tonnes
- Average coal price fell to $400 a tonne – down 24% quarter-on-quarter but up 27% year-on-year
- Sales of produced coal slumped to 3.4 million tonnes – down 2% quarter-on-quarter and 5% year-on-year
- Generated $1.2 billion of cash from operations
- Ended the period with a $2.7 billion net cash position
What else happened last quarter?
Whitehaven Coal's lower quarterly production reflects a drop in its Narrabri operation's performance following a ripper December quarter. ROM production at the operation slumped 39% quarter-on-quarter while saleable coal production dropped 43%.
Simultaneously, production at its Maules Creek mine lifted just 9% despite wet weather and flooding taking a major toll last quarter, while lower yields saw its saleable coal production flat at 1.7 million tonnes.
The company also continued its on-market share buyback – spending $100 million on the capital returning activity.
What did management say?
Whitehaven CEO and managing director Paul Flynn commented on the release driving the company's share price today, saying:
A mild northern hemisphere winter meant that customers' inventory levels remained high in the March quarter, demand was softer and thermal coal prices moderated.
Despite this, underlying demand remains strong …
We are well placed to maintain a strong balance sheet through the cycle while continuing to return capital to shareholders through our share buy-back program. So far this financial year we have returned $1.3 billion of capital through dividends and buybacks.
What's next?
Looking forward, Whitehaven expects thermal coal prices to be supported through the remainder of 2023. Meanwhile, the metallurgical coal price is expected to stay above historical levels, but remain volatile due to economic pressures.
The company downgraded its full-year guidance earlier this month. It now forecasts its managed coal sales to come in between 15.3 million tonnes and 16 million tonnes, its equity coal sales to be between 12.3 million tonnes and 12.9 million tonnes, and its unit cost of coal to be $100 a tonne to $107 a tonne.
Whitehaven also began supplying coal to NSW power stations at a capped price of $125 a tonne this month. The volumes provided will be disclosed in its next quarter report.
Finally, the commencement of early mining at its Vickery coal deposit has been approved with construction to kick off in June.
Whitehaven Coal share price snapshot
The Whitehaven share price has had a disappointing start to 2023.
The stock has tumbled 21% since the start of the year. Though, it's still 45% higher than it was this time last year.
Comparatively, the ASX 200 has gained 6% year to date and has fallen 3% over the last 12 months.
