Whitehaven Coal Limited

Whitehaven reported revenue of AUD 2.5 billion, underlying EBITDA of AUD 446 million, an underlying net loss of AUD 19 million, and statutory NPAT of AUD 69 million for the half year. Average realized coal price was AUD 189/tonne, with Queensland at AUD 212/tonne and New South Wales at AUD 168/tonne; average cost of production was AUD 135/tonne and half-year margins were 34%. ROM production was 20 million tonnes, split between Queensland 10.3 million tonnes and New South Wales 9.7 million tonnes, and equity sales were 12.8 million tonnes. Management said it is tracking to the bottom end of its cost guidance at AUD 135/tonne, expects a new above-rail contract to save about AUD 3/tonne from July, and reaffirmed capital spending of AUD 157 million in the half. For FY26, it said it remains on track to the upper end of production guidance and the lower end of cost guidance, while continuing to target AUD 60 million-AUD 80 million of annualized cost savings by year-end.

Paul Flynn described the first half as a solid foundation for the year, with strong operations, good safety performance, and no enforcement action events despite wet conditions. He emphasized that the market has improved since the quarter and that customer demand remains healthy, with customers still seeking option tonnes. His tone was constructive and confident, particularly around the second half, cost-out opportunities, and the company’s long-term growth position in Asia.

Kevin Ball focused on the financial bridge: softer prices and the 30% Blackwater sell-down drove a large decline in sales volume/price, while port queuing and weather created a roughly AUD 2-AUD 2.50/tonne cost headwind. He highlighted that average realized price was AUD 189/tonne, production cost was AUD 135/tonne, and margins were 34%, but said costs are at the bottom end of guidance and should improve with a new haulage contract that he expects to save about AUD 3/tonne. He also noted net debt of AUD 710 million, liquidity of AUD 1.5 billion, and said the company plans to refinance the USD 1.1 billion term loan, with the acquisition debt currently costing about 10.5% and management preferring a 6- or 7-handle rate.

Analysts pressed management on the refinancing of the USD 1.1 billion term loan, and Kevin Ball said the company has been working on it for 6-8 months and expects to refinance before 30 June, preferably at a rate starting with a 6, or at least a 7. Questions on the Queensland cost reset focused on whether AUD 140-AUD 145/tonne was a stepping-off point or a steady-state level; Paul Flynn said FY28 is the lower-cost end of the range and that the company expects costs to average down through the five-year period, but he would not give guidance beyond that. The Q&A also covered the dividend and buyback structure, with management clarifying that each six-month buyback program is closed and replaced rather than rolled forward, and questions on Vickery, Blackwater expansion, and met coal pricing, where management said the projects remain under review and customer demand is still firm despite some price softness.