Increased low-ash thermal coal production from Whitehaven Coal's Narrabri underground mine in New South Wales was a key driver for a 48% year-on-year rise in the Australian coal producer's earnings before interest, depreciation and tax to A$50.8 million ($45.7 million) for the six-month period ended December 2013, it said in a report Wednesday.
Attributable coal sales for Whitehaven in the half year to December 2013 were 4.3 million mt, driven by a doubling in Narrabri mine production to 2 million mt in the period and up 36% from the company's total sales of 3.55 million mt in the year-ago period.
Narrabri mine is 70% owned by Whitehaven, with the remaining 30% share split equally between four joint venture parties including EDF Trading and South Korean companies Daewoo and Korea Resources Corp.
Revenue from coal sales was A$402 million in the fiscal first-half, up 43% year on year, Whitehaven said in its report.
"The fundamentals of the business are now showing some very encouraging upside and we believe we have enhanced our resilience to volatility on coal prices," Whitehaven Coal managing director Paul Flynn said in a company statement.
Saleable production for the full fiscal year ending June 2014 is forecast to be 10.7 million mt on a 100% equity basis.
Thermal coal accounted for 83% of Whitehaven's coal sales in the reporting period, up from 81% a year ago. The remaining 17% of the coal producer's output in the half-year period was semi-soft coking coal.
Whitehaven said in a presentation accompanying its report that it had resolved an issue to do with the energy level of its Narrabri thermal coal product, and as a result had achieved sales prices in line with benchmark Newcastle 6,300 kcal/kg GAR specification thermal coal.
Cash flow from the miner's operations was A$78.3 million in the six-month period ended December, reversing a A$100 million negative cash flow position in the year-ago period.
Production costs at Whitehaven, which operates several mines in the Gunnedah coal field in New South Wales, fell 10% year on year in the half-year period, mainly due to increased efficiency and greater use of its contracted rail and port capacity, the company said.
Average unit cost per metric ton for Whitehaven's coal sales was A$71.70/mt for the reporting period, compared with A$79.30/mt in the six-month period ended December 2012, said the coal producer.
Take-or-pay charges for rail and port capacity used by the coal producer to ship its coal exports amounted to A$1.55/mt during the six months, down from A$2.53/mt in the year-ago period, said Whitehaven.
Flynn said the company was of the view that underlying demand for Australian coal, particularly for higher grades of metallurgical and thermal coal, would continue to trend upwards.
Maules Creek, Whitehaven's flagship development project for semi-soft coking, high-energy thermal coal and PCI coal was on schedule to produce its first mined coal in March 2015, said the company.
"We completed the expansion at Werris Creek, and started work on the new mine at Maules Creek where construction has been ramped up significantly since early January after we cleared the last legal and regulatory hurdles for the project," said Flynn.
Net debt for the company increased to A$557 million at the end of December 2013, from A$471 million a year ago, as Whitehaven tapped a credit facility to develop Maules Creek, and funded an expansion of its open-cut mines including Werris Creek to 2.5 million mt/year from 2 million mt/year previously.
