When going gets good, everything that happens turns to your advantage. Strong demand for Australian coal with excellent dividend yield were the primary factors contributing to surge in Best Coal Company Stocks. The shares of Whitehaven and Yancoal were further propelled with the news of fire mishap at Anglo American's biggest Australian metallurgical coal project leading to a production halt. A matter of relief was the safe evacuation of its mine workers without injury.
Anglo American stating that it may have a months long impact and Australia dominating the seaborne met coal, ASX Coal Mining Companies can have the potential of continuing their growth run.
Whitehaven Coal Limited (ASX: WHC)
Whitehaven Coal Limited, on 16 May 2024, announced the dismissal by the Full Federal Court of an application put by the Environment Council of Central Queensland Inc.
This judgment enables the Federal Minister to make a final decision on the EPBC application for the Narrabri Stage 3 project, which is expected to extend the mine's life from 2031 to 2044.
With the acquisition of BMA’s Daunia and Blackwater coal mines, completed on April 2, Whitehaven has transformed into a leading metallurgical coal producer. For the March quarter, managed run-of-mine (ROM) production was 4.4 million tonnes (Mt), 13% lower than the December quarter. However, year-to-date ROM production reached 14.7 Mt, which is 12% above the prior year. Managed sales of produced coal for the March quarter were 3.8 Mt, 16% lower than the December quarter, and total equity sales of produced coal stood at 3.1 Mt, 16% lower.
Despite these quarterly fluctuations, Whitehaven is on track to meet its overall ROM production guidance of 18.2 – 20.7 Mt and sales guidance for FY24.
The company is expanding its operations through key projects currently under the capital allocation framework. Vickery early mining project is making significant progress. Narrabri underground mine stage 3 expansion is likely to improve the company's production profile.
The company's strong growth trajectory and financial profile are demonstrated by the significant revenue growth achieved over the years, with remarkable increases from $1.72 billion in 2020 to $6 billion in 2023. Further, the company's earnings have experienced exceptional growth, rising from $30 million to $2.66 billion. This impressive growth is expected to continue in both the short and long term, because of key expansion plans in Whitehaven's pipeline
Yancoal Australia Limited (ASX: YAL)
Yancoal Australia Limited, which is the prominent coal producer in the seaborne market, is likely to be in a more advantageous position.
One of the Best Coal Companies to Invest in, the company has achieved substantial growth in revenue generation over the past few years, increasing from $4.65 billion in 2019 to $7.77 billion in 2023. During the same period, earnings have grown from $719 million to $1.81 billion, reflecting improved earning capabilities. Additionally, the company has significantly reduced its debt levels, decreasing from $3.49 billion in 2019 to $146 million in 2023, thus strengthening the company's balance sheet.
In FY23 Yancoal reached significant milestones in coal production, with ROM (Run of Mine) coal production coming to 60.2 million tonnes (100% basis). The second half of the year saw a notable 44% increase in production, reflecting the effective implementation of mine recovery plans.
Financially, Yancoal began the year with a strong cash position of $2.7 billion. Significant expenditures included $1.7 billion in tax payments related to record profits in 2022, $1.4 billion in fully franked dividends to shareholders, and the final repayment of the Group's loans amounting to $496 million. Despite these outflows, Yancoal maintained a robust cash balance of $1.4 billion at the end of 2023, indicating prudent financial management amidst challenging market conditions.
Sources - Company Reports
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