Whitehaven Coal (ASX:WHC) share price slumps despite positive profit outlook

Record-high coal prices spell good news for Whitehaven as it looks to become debt-free
The post Whitehaven Coal (ASX:WHC) share price slumps despite positive profit outlook appeared first on The Motley Fool Australia. –

The Whitehaven Coal Ltd (ASX: WHC) share price is falling today despite the company releasing a positive quarterly report.

The company states record-high coal prices will see its profits increasing soon, helping it to become debt-free in early 2022.

That’s particularly impressive given Whitehaven owed $787.5 million at the end of financial year 2020.

However, the market doesn’t seem to be sharing Whitehaven’s positive sentiments.

At the time of writing, the Whitehaven Coal share price is $3.25, 1.36% lower than its previous close.

Let’s take a closer look at the pure-play coal miner’s performance over the September quarter.

The quarter that’s been for Whitehaven

The Whitehaven Coal share price is slipping today despite good news for the 3 months ended 30 September 2021.

The company has announced its bottom line has begun to be bolstered by record-high thermal coal prices, which reached an average of US$167.52 per tonne over the September quarter, according to the GlobalCOAL Index. That represents a 54% increase on that of the June quarter.

As of 13 October, the GlobalCOAL Index puts the price of thermal coal even higher, at US$232.06 a tonne.

The increased prices have likely boosted confidence in Whitehaven’s expectation of being in a net cash position in the March quarter of 2022.

However, Whitehaven didn’t realise such astronomical prices over the quarter just been. The company’s realised average thermal coal price for the September quarter was US$142 per ton – 15% less than the index’s average price.

The disparity was due to most of Whitehaven’s thermal coal book having been priced in previous periods and its fulfilment of previously agreed-upon fixed-price sales. Additionally, some of its sales were delayed from previous quarters.

However, the company expects to see its profits boosted in coming months.

Finally, here’s a breakdown of Whitehaven’s technical performance over the quarter just been:

Run-of-mine production of 5.2 million tonnes – up 15% on the prior corresponding period (PCP);
Saleable coal production of 4.7 million tonnes;
Total managed coal sales of 4.6 million tonnes – down 23% on that of the PCP;
Managed own coal sales of 4.2 million tonnes – down 25% on that of the PCP;
Total equity coal sales of 3.9 million tonnes;
Equity sales of own coal of 3.4 million tonnes –  25% less than PCP; and
As of 30 September, it had managed coal stocks of 3.2 million tonnes ­– 80% more than it did as of 30 September 2020.

Whitehaven Coal share price snapshot

Despite today’s dip, the Whitehaven Coal share price has been performing well so far this year.

It has gained 97% since the start of 2021. It’s also 245% higher than it was this time last year.

The post Whitehaven Coal (ASX:WHC) share price slumps despite positive profit outlook appeared first on The Motley Fool Australia.

Should you invest $1,000 in Whitehaven Coal right now?

Before you consider Whitehaven Coal, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Whitehaven Coal wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Adriatic Metals, Platinum, Redbubble, & Whitehaven Coal are dropping

Why I’d hold this coal-mining ASX share for 4 years: expert

Star Entertainment and SkyCity share prices plunge, Whitehaven Coal up. Scott Phillips on Nine’s Late News

Here are the top 10 ASX shares today

Here are the 3 heaviest traded ASX 200 shares on Monday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!