The Whitehaven Coal Ltd (ASX: WHC) share price has lifted on Wednesday after the company released its financials for the Q2 FY25 period.
Shares in the coal miner soared to an intraday high of $6.33 in early trade. However, as investors digest the company's numbers, the Whitehaven share price has lost ground to trade at $6.13 apiece, up 1.3%.
Zooming out, the stock has fallen around 1% this year to date. Let's take a look at what the company posted.
Whitehaven share price higher on 'good quarter of production'
Whitehaven delivered plenty of quarterly highlights that see it "firming up a strong half-year". These include:
- Managed run-of-mine (ROM) production was 9.7 million tonnes (Mt), in line with the prior quarter.
- Finished with 7.8Mt of equity sales of produced coal, a 22% increase from last quarter.
- Average coal prices hit $237 per tonne for its QLD operations and A$211 per tonne for NSW.
- Unit production costs were at the lower end of FY25 guidance.
- Reduced net debt by $200 million to $1 billion as of 31 December 2024.
What else happened in Q2?
The Whitehaven share price fluctuated in the last three months of 2024, which coincided with Q2 FY25. However, business conditions were more stable.
Whitehaven's Queensland operations delivered sales growth of 28% for the quarter, selling 4.6 Mt of coal.
Managed ROM production from Queensland mines also reached 4.6Mt, though this was down 14% from the previous quarter.
In contrast, Whitehaven's New South Wales operations saw a 17% boost in ROM production to 5.1Mt. This resulted in a 15% increase in sales volumes.
The company also reduced its debt load by about $200 million during the quarter, finishing the period with $1 billion in debt on the books.
Meanwhile, Whitehaven is set to book US$1.08 billion of proceeds from the "30% sell down" of its Blackwater coal mine. The company said the first payment was due in July 2025. This may or may not be positive for the Whitehaven share price.
What did management say?
Whitehaven CEO Paul Flynn welcomed the company's performance results, saying:
I'm pleased to report another solid quarter of production and sales across our operations to close the first half of FY25 with strong ROM production of 19.4Mt, including 9.9Mt from our Queensland mines and 9.4Mt from our New South Wales mines.
Production and sales volumes are tracking very well, including record sales volumes from Daunia in the December quarter. We are on track to deliver firmly in the upper half of FY25 production and sales guidance, and at the low end of our full year cost guidance range.
We are continuing to reshape our Queensland business for long-term success, with good progress being made to deliver productivity gains and cost improvements.
What's next?
Whitehaven expects coal prices to fluctuate due to an "expected shortfall" of global coal production and a "long-term depletion" from Australian producers that will "drive higher metallurgical coal prices".
The "peak winter conditions" in Asia are also expected to drive global coal demand, which could be positive for the Whitehaven share price.
CEO Flynn was adamant the Blackwater proceeds would be put to good use to grow the business.
We expect to receive the US$1.08 billion of proceeds from the 30% sell down of Blackwater in Q3 FY25, further strengthening the balance sheet and providing an opportunity to review Whitehaven's capital allocation at the end of FY25.
Whitehaven share price snapshot
The Whitehaven share price is down more than 25% in the past year, driven by fluctuations in the coal market.
It is rated a buy from the consensus of analyst estimates, according to CommSec data.
