The Coronado Global Resources Inc (ASX: CRN) share price is having a disappointing session.
In morning trade, the coal miner's shares were down as much as 12% to $1.44.
This follows the release of the company's half-year results this morning.
Coronado share price lower on earnings plunge
- Revenue down 24.6% to US$1,493.2 million
- Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) down 58.4% to US$352.3 million
- Net income down 64.6% to US$199.2 million
- 0.5 US cents per CDI dividend declared
For the six months ended 30 June, Coronado reported a 24.6% decline in revenue to US$1,493.2 million. This was driven by an 8% fall in sales volumes to 7.6MMt and a 21.8% reduction in the average realised coal price to US$229.1 per tonne.
And with Coronado's mining cost per tonne increasing 14.1% to US$97.2, this put significant pressure on its margins and ultimately led to first-half net income falling 64.6% to US$199.2 million.
Management advised that its higher mining costs are attributable to inflationary pressures, higher government royalties in Queensland, and the impacts of lower production in the March quarter.
Pleasingly, it expects its average mining costs per tonne sold to trend lower in the second half. This is due to global inflation rates moderating further and its second-half production plans.
At the end of the period, the company had a net cash position of US$191.8 million, which represents an increase of 12% compared to the same time last year.
Management commentary
Coronado's managing director, Douglas Thompson, was pleased with the way the company finished the half after a difficult first quarter. He said:
A strong operating performance in the June quarter saw Coronado overcome the weather-related difficulties we experienced at the start of 2023 and post the second-highest first-half revenue numbers in the Company's history. Notably, these revenue numbers come despite higher royalties, high global inflation, and Met Coal prices below the record highs of 2022.
Thompson also appears optimistic that demand for coal could increase now that inflation appears to be easing. He adds:
With signs that global inflation is beginning to moderate, increased economic confidence and activity will help stimulate demand for steel and Met Coal. While we are aiming to significantly increase production over the next two years, we are also committed to reducing emissions, and the 11% reduction in Scope 1 and 2 emissions achieved over the past 12 months, has contributed to our goal of a 30% reduction by 2030.
Guidance
Failing to give the Coronado share price a boost was its guidance for FY 2023.
It continues to expect saleable production to be between 16.8 MMt and 17.2 MMt for the year. This compares to 8.2 MMt during the first half.
It has also held firm with its guidance for mining costs per tonne sold of US$84 to US$87 per tonne. Investors appear doubtful that it will deliver on this given how much higher its first-half costs were.
