The result for the six months to December – which compares with a $19.9 million profit for the previous corresponding period – was in part due to the high moisture content in the Narrabri coals and lower coal prices, outgoing managing director Tony Haggarty said.
"Notwithstanding these influences, which are inherent in the resources sector, significant work has been undertaken across the company to minimise the impact of the commodity cycle,” he said.
"While we are already well placed on the cost curve, we are continuing to review our open cut operations to identify opportunities to further reduce costs, and enhance operating performance and revenue.
"The ramp-up of our Narrabri longwall production progressed well through the later stages of the first half. Ensuring that Narrabri meets consistent high production rates remains a key focus for our business.
"Higher than anticipated moisture in the Narrabri thermal coal has had a negative impact on our revenue, and while this issue will diminish as production increases, a number of operational actions are being taken to reduce moisture levels in the product coal.”
Unfavourable foreign exchange impacts, the cost of putting the Sunnyside mine into care and maintenance, and the Boggabri train derailment late last year also had an adverse effect on the company’s profitability.
Saleable coal production increased 47% to 3.625 million tonnes compared to the previous corresponding half, with total coal sales rising 19% to 3.924Mt. Half yearly sales revenue was down by 17.5% to $280.8 million.
The Narrabri longwall ramp-up is progressing with 1.576Mt produced in the six months to December 31. Work is also continuing to ensure the Maules Creek development can be brought into production as rapidly as possible after the federal government gave it conditional approval, Haggarty said.
"While the Maules Creek project is very large in scale, the construction and development phase of the open cut development is relatively uncomplicated,” he said.
"Regardless of external factors Whitehaven remains on the path towards its target of becoming a 25Mtpa producer.
“Our recent executive appointments, including Paul Flynn to take on the managing director/CEO role, ensure we have a very experienced, well-qualified, balanced and capable team to deliver this growth.”
