Whitehaven Coal (WHC) 20.10.2020
This is not a recommendation or proposal to do anything. The data written in this article is not guarranteed. It is my private personal opinion. I own a position of Whitehaven Coal shares that`s why I`m not independing.
Whitehaven operates 3 coal mines in New South Wales and Queensland Australia.
Acc. to (4) the coal price decreased to 51$/ton. That means the coal mines of WHC that claim costs of 54 USD/ton is not profitable at the moment! WHC has stopped the key development projects and is potentially reducing its capex to the minimum required.
IF WHC will survive it becomes very profitable again. The share price might x-fold.
A risk for WHC are shareholder resolutions against the business purpose of the company by green minded institutional investors betraying their clients. The last ones got 40% of the vote and thus might intimidate the management see below.
Mine Annual Prod. Comment
Total Production Mt 20.0 - 22.0 Production weighted to second half (H2 ~60%)
Maules Creek Mt 10.0 - 11.0 Skilled labour shortages and drought impacts
Narrabri Mt 6.0 - 6.5 Longwall changeout in the December 2019 quarter
Gunnedah Open Cuts Mt 4.0 - 4.5
Cost of Coal (excluding Royalties) $/t 49 USD/to
Maules Creek 13Mtpa ROM >35 years • Mine ramping up to 16Mtpa ROM with the roll out of AHS, commencement of in-pit dumping and 16Mtpa modification application
Narrabri Stage 3 11Mtpa ROM >25 years • Extends mine life to 2045
Tarrawonga 3.0Mtpa ROM ~10 years • Ramp up production to 3.0Mtpa ROM
Vickery Seeking 10Mtpa ROM >20 years • Open pit metallurgical and thermal coal production • On site coal handling preparation plant • Rail from site. Approved with 4.5mio tons/yr
Winchester South ~ 15Mtpa ROM >25 years • Whitehaven’s expansion into the Bowen Basin • Open pit metallurgical and thermal coal production,
WHC fiscal year is from July 1st - June 30th
Share Price 26.08.2020: 1.02 AUD/share
Exchange Rate 26.08.2020: 1 AUD = 0.72 US$
FY 19 FY 20 1/2 FY 20
Revenues (mio. USD): 1660 590 1239
Unit costs/USD ton: 44.7 51 54
Net Debt (mio. USD): 107 423 567
Dividend (c): 20 1.5
Net Profit (mio. USD): 351 19 21
Profit/share (c): 35 1.9 2.1
Markable Reserves in mio. t: 844 826
Measured+Ind. Resources mio. t: 2994
Production mio ton: 23, 19.5% met 16.6
Number of Shares: 1,026,045,885 Outstanding: 1003,004,000
Metalurgical coal price is usually 40 - 60% higher than thermal coal.
Customers in 1000 AUD 2019/2018 Comparison Revenue by geographic location
2020 2019 2018
Japan 844,007 1,255,751 1,168,965
Taiwan 256,089 262,015 302,279
Korea 231,217 351,328 252,039
India 134,814 201,637 128,540
China 28,507 66,541 87,184
Malaysia 51,346 100,267 63,352
Indonesia 26,593 48,755 60,410
Vietnam 67,861 47,323
Philippines 37,786 35,933 30,836
Total revenue 1,721,609 2,487,944 2,257,446
Au$225.9 million paid 2019 to the NSW Government in mining royalties and a further $97.9 million paid in a range of taxes to state and federal governments;
Australien verzichtet auf die Erhebung der Quellensteuer, sofern die Dividenden aus Gewinnen bezahlt werden, die bei der australischen Gesellschaft voll besteuert worden sind (franked dividends) oder es sich um die Ausschüttung von so genanntem „conduit foreign income“ handelt. Andere Dividenden werden weiterhin mit 30 % besteuert, wobei die Quellensteuer aufgrund des DBA, je nachdem, auf 15 %, 5 % oder 0 % herabgesetzt wird.
2020/10/20 “In China, the arbitrage between domestic and import prices remain above $US25 ($35) per tonne, supporting the demand for imported coal and it is unclear if China will relax its custom clearance times and allow for further imports" (6). I assume that China limited imports to support its own coal industry.
2020/10/15 Whitehaven Coal has paused three key development projects, including the Narrabri and Vickery extension projects in New South Wales and the Winchester South metallurgical coal project in Queensland(6).
2020/10/12 China bans Australian coal imports as relations sour. China has suspended purchases of Australian coal. Chinese power stations and steel mills have been verbally told to immediately stop using Australian coal, and ports also have been told not to offload Australian coal, according to the report (5).
2020 05 The New South Wales Government has given Whitehaven Coal the all-clear to extend the Vickery coal mine in New South Wales (2).
6, Oct. 15, 20https://www.australianmining.com.au/news/yancoal-scales-back-spending-to-weather-unpredictable-coal-storm/20 https://www.australianmining.com.au/news/whitehaven-to-delay-key-projects-amid-coal-slump/
5. Oct. 12, 2020 https://seekingalpha.com/news/3621421-china-bans-australian-coal-imports-relations-sour-bloomberg?utm_medium=email&utm_source=seeking_alpha&mail_subject=rio-china-bans-australian-coal-imports-as-relations-sour-bloomberg&utm_campaign=rta-stock-news&utm_content=link-3