Whitehaven Coal Ltd (ASX: WHC) shares will be in focus next week as the ASX coal share is due to hand in its FY23 result on 24 August 2023.
It has been a volatile, but ultimately successful, year for the ASX mining share as the Whitehaven share price has gone up by around 40% and made a lot of profit.
Let's dig into some of the numbers that the business might report.
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What we already know about Whitehaven shares
A month ago, the business announced its quarterly update for the three months to June 2023. With the completion of that period, it was able to tell investors about some of its annual numbers for FY23.
The company said it achieved an average coal price of A$445 per tonne in FY23, which was higher than the A$325 per tonne in FY22. However, the last quarter of FY23 saw an average coal price of A$264 per tonne.
Whitehaven also said that its annual managed run-of-mine (ROM) production was 18.2 million tonnes (mt), which was within its guidance of 18mt to 19.2mt. This compared to FY22 managed ROM coal production of 20mt.
FY23 total equity sales of produced coal was 13mt, down 8% year over year. FY23 managed sales of produced coal was 16mt, down from 17.6mt in FY22.
Cash generated from operations was $4.2 billion in FY23, with $435 million of that coming in the last quarter. Cash generation is a key component of what shareholder payouts Whitehaven shares can pay.
It also told us that it had a net cash position of $2.65 billion at June 2023, so the balance sheet is in a strong position. In FY23 it bought back a total of $948.9 million shares.
The ASX coal share will provide guidance for FY24 ROM coal production and sales tonnages, capital expenditure and unit cost guidance with the FY23 result.
Expectations for the FY23 result
According to estimates on Commsec, Whitehaven shares are expected to generate earnings per share (EPS) of $2.98, which would mean an impressive rise of just over 50% year over year.
That profit generation could enable the business to pay an annual dividend per share of 56 cents, which would be a grossed-up dividend yield of 10.7%. Considering the business has already paid a half-year dividend of 32 cents per share, the projection implies a final dividend of 24 cents per share, which would be a grossed-up dividend payment of 4.6% by itself.
According to Commsec, investment bank Goldman Sachs is projecting that Whitehaven could generate FY23 earnings before interest, tax, depreciation and amortisation (EBITDA) of $3.9 billion and make a net profit of $2.6 billion. The broker expects an annual dividend of 61 cents per share and EPS of $2.92.
It must be noted that current estimates for Whitehaven shares suggest that profit could more than halve in FY24 and the annual dividend could approximately halve as well. But that could largely depend on what happens with coal prices.
Outlook for the coal market
In the June quarterly update, Whitehaven said:
We expect coal prices to remain subdued during the Northern Hemisphere summer period while high coal stocks at end user facilities and cheaper alternatives, including gas are available. We maintain our view that increased gas and coal demand for the winter period will mark a turning point in the market where trade flows and the tightness of high CV coal supply will provide support for pricing. In metallurgical markets, volatility is expected to continue for the balance of CY23 reflecting uncertainty around the strength of economic activity in developed and developing economies.
