Whitehaven Posts 9.7Mt Production, Cuts Net Debt to A$1B in Q2 FY25
Whitehaven Coal delivered a robust Q2 FY25 with record sales volumes and production costs at the low end of guidance, while preparing for a major $1.08 billion capital inflow from its Blackwater mine stake sale.
- Q2 FY25 managed ROM production steady at 9.7Mt, sales up 22% to 7.8Mt
- Unit production costs remain at lower end of FY25 guidance range
- Net debt reduced to A$1.0 billion, with $1.08 billion expected from Blackwater stake sale
- Strong sales growth in Queensland and New South Wales operations
- Ongoing cost reduction initiatives targeting $100 million annual savings by FY25 end
Solid Production and Sales Performance
Whitehaven Coal has reported another strong quarter for Q2 FY25, maintaining managed run-of-mine (ROM) production at 9.7 million tonnes, consistent with the previous quarter. More notably, equity sales of produced coal surged 22% quarter-on-quarter to 7.8 million tonnes, underscoring robust demand across its portfolio.
The company’s Queensland operations, despite a 14% dip in ROM production due to seasonal weather disruptions, posted a 28% increase in sales volumes, driven by record sales from the Daunia and Blackwater mines. Meanwhile, New South Wales operations saw a 17% increase in ROM production and a 15% rise in sales, supported by strong performances from open cut mines and steady output from Narrabri.
Cost Discipline and Financial Strength
Whitehaven’s unit production costs remain at the lower end of its FY25 guidance range of A$140–155 per tonne, reflecting successful productivity and cost-out initiatives, particularly in Queensland. These efforts aim to deliver an annualised run rate of $100 million in savings by the end of FY25, a significant efficiency milestone.
Financially, the company has reduced net debt to A$1.0 billion as of 31 December 2024, down from A$1.2 billion the previous quarter. This deleveraging is set to accelerate with the anticipated receipt of US$1.08 billion from the planned 30% sell-down of the Blackwater mine to Nippon Steel and JFE Steel in Q3 FY25, which will further strengthen Whitehaven’s balance sheet and provide flexibility for capital allocation decisions.
Market Dynamics and Outlook
Whitehaven’s sales mix remains weighted towards metallurgical coal (~63% by revenue), with average realised prices in Queensland at A$237 per tonne, equivalent to 75% of the Platts PLV HCC Index. New South Wales thermal coal prices held steady at A$211 per tonne, aligned with the gC NEWC Index. The company highlights a structurally tight global metallurgical coal market, driven by long-term supply constraints and growing demand from India, positioning its portfolio for potential price appreciation.
Looking ahead, Whitehaven expects to deliver production and sales firmly in the upper half of FY25 guidance, with unit costs at the low end of the range. Planned operational activities include an eight-week longwall move at Narrabri in late February, which may temporarily impact volumes in H2 FY25. Capital expenditure remains guided between A$440 million and A$550 million, with development projects like Winchester South and Narrabri Stage 3 progressing under strict capital discipline.
Strategic Capital Allocation and Growth
The forthcoming Blackwater transaction proceeds will provide Whitehaven with enhanced financial flexibility to review its capital allocation framework at the end of FY25. This could influence future investment decisions amid a backdrop of evolving market conditions and the company’s ongoing focus on operational excellence and cost efficiency.
Overall, Whitehaven’s Q2 FY25 results reinforce its position as a leading Australian coal producer navigating market volatility with disciplined execution and strategic foresight.
Bottom Line?
Whitehaven’s strong operational momentum and upcoming Blackwater sale set the stage for strategic capital moves and market resilience in FY25.
Questions in the middle?
- How will Whitehaven deploy the $1.08 billion proceeds from the Blackwater stake sale?
- What impact will the Narrabri longwall move have on H2 FY25 production and sales?
- Can Whitehaven sustain cost reductions amid potential market and operational challenges?
