Whitehaven Coal has reported a $2 billion net profit after tax as the company posted its full financial year results.
During the year, debt was fully repaid and $1 billion of net cash was held on the company’s balance sheet at the end of the 2021-22 financial year.
The company’s CEO and managing director Paul Flynn said the longer-term under-investment in energy sources needed to supply baseload capacity to growing populations and economies has contributed to a widening gap between supply and demand.
“In the 2021-22 financial year, we saw global energy shortages intensify as a result of the tragic conflict in Ukraine and associated sanctions against Russian coal and gas,” he said.
“Coal prices are at record levels, and customers are focused on energy security now more than ever before.
“We have worked hard to position ourselves to maximise the opportunity arising from historically high prices. We achieved a record realised average price of A$325 per tonne in FY22, compared with A$95 per tonne in the prior year.
“Despite COVID-related absences, labour constraints and weather interruptions, our team delivered solid operational and product quality improvements in FY22.
“Pleasingly, our safety results also reflected the improved operational performance and focus of our people. In FY22 we reported a recordable injury frequency rate of 5.4, which was eight per cent better than last year and compared to where we were five years ago – represents a 22 per cent improvement.”
Mr Flynn said with the significant increase in Whitehaven’s earnings, including a $2 billion net profit after tax, and exceptionally strong
operating cash flows, Whitehaven is maintaining a disciplined approach to capital allocation to build business resilience and deliver shareholder value in the near- and longer-term.
“We are successfully executing a 10 per cent on-market buy-back program, and we are commencing paying fully franked dividends,” he said.
“With strong cash flows expected to continue, we will use capital to maintain and optimise our existing operations, retain cash on the balance sheet for future optionality, and return surplus capital to shareholders through franked dividends and share buy-backs.”
Among its end of financial year highlights, Whitehaven reported an eight per cent improvement in safety performance as measured by a total recordable injury frequency rate.
Run-of-mine (ROM) managed production volumes of 20 mega-tonnes, which was within guidance range, was also achieved.
Record revenue of $4.9 billion was underpinned by an achieved average coal price of A$325/t (compared with $1.56 billion revenue and A$95/t average price in the prior year).
Cash generated from operations of $2.6 billion compared with $169.5 million in the prior year.
Mr Flynn said demand for high-quality seaborne thermal coal is expected to remain strong throughout this financial year and high coal prices should continue to be well supported.
“We expect to deliver higher run-of-mine production and coal sales in FY23 compared with FY22, and we are focused on maximising margins, including managing inflationary cost pressures.
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