Up 45% in FY 2024, can the Yancoal share price keep burning bright in FY 2025?

The Yancoal share price leapt 45% in the financial year just past and is off to a roaring start in FY 2025.

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The Yancoal Australia Ltd (ASX: YAL) share price just closed out a smashing 2024 financial year.

Shares in the All Ordinaries Index (ASX: XAO) coal stock finished off FY 2023 trading at $4.58. Shares closed on 28 June, the last trading day of FY 2024, changing hands for $6.62 apiece.

That saw the Yancoal share price up a whopping 44.5% over the 12 months.

For some context, the All Ords gained 8.3% over this same time.

And this stellar performance doesn't even include the outsized dividends the coal miner paid out. In FY 2024 eligible investors will have received a total of 69.5 cents a share in fully franked dividends.

If we add those back in, the accumulated value of the Yancoal share price leapt 59.7% over the financial year just past.

Why did the ASX coal stock have such a strong year?

Yancoal has done a good job keeping a lid on costs while increasing production, even as it focused on its mine recovery plans.

In fact, Q2 FY 2024 saw the miner achieve its highest rate of quarterly production in three years, offering another boost to the Yancoal share price.

Over the full calendar year of 2023 (which includes H1 FY 2024), Yancoal reported $7.8 billion in revenue. Operating earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at $3.5 billion. This drove an eye-catching $1.8 billion in after-tax profit.

As for Q3 FY 2024, the miner continued to generate strong cash flows. Yancoal held $1.66 billion in cash at the end of March. That was before paying out $429 million for the final dividend on 30 April.

With that picture in mind, what can investors expect from the Yancoal share price in FY 2025?

What's ahead for the Yancoal share price in FY 2025?

Much of the performance of the Yancoal share price will be determined by the price the miner receives for its thermal and coking coal.

In 2023, the company's realised price came out to AU$180 per tonne.

That's roughly double the cash operating costs of $80 to $97 per tonne that Yancoal is targeting in H1 FY 2025. Cash operating costs were AU$96 per tonne in calendar year 2023.

Looking to the year ahead, back in April, CEO David Moult said:

We see Yancoal's large-scale, low-cost coal production profile as well suited to the current coal market conditions. Having no interest-bearing loans, a large net cash position and robust operating margins provides us with the capacity to act should suitable growth opportunities arise.

The miner's 2024 calendar year guidance is for 35 million to 39 million tonnes of attributable saleable production.

On 30 May, at the annual general meeting, the miner reported:

Output will vary quarter-to-quarter due to mine plan sequences, longwall moves and planned maintenance, and there will be a second half weighting to the production profile.

We aim to bring the cash operating costs per tonne down from the full-year 2023 level and are focused on output given the direct relationship between the volumes we produce and the per tonne cash operating costs we report.

Halfway through week two of FY 2025, the Yancoal share price stands at $7.27. That's up 9.8% so far in the new financial year.

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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