How Did Whitehaven Coal Achieve Record Production Amid Market Headwinds?
Whitehaven Coal reported a robust FY25 with underlying NPAT of $319 million and record production, while maintaining a strong balance sheet and announcing shareholder returns. The company’s FY26 guidance signals continued operational focus amid stabilizing coal markets.
- Underlying NPAT of $319 million, stable underlying EBITDA of $1.4 billion
- Record run-of-mine production of 39.1 million tonnes, 60% increase year-on-year
- Revenue surged 53% to $5.8 billion, supported by average coal price of A$215/t
- Achieved $100 million annualised cost reductions in Queensland operations
- Declared fully franked final dividend and initiated $48 million share buy-back
Strong Operational Performance Amid Market Cycles
Whitehaven Coal Limited (ASX, WHC) has reported a solid financial and operational performance for the fiscal year ended 30 June 2025. Despite a softer second half reflecting cyclical downturns in coal prices, the company delivered an underlying net profit after tax (NPAT) of $319 million and underlying EBITDA of $1.4 billion, matching the previous year’s result. This resilience was underpinned by a record run-of-mine production of 39.1 million tonnes, a 60% increase over FY24, driven by the successful integration of Queensland operations at Daunia and Blackwater.
Revenue Growth and Cost Discipline
Revenue jumped 53% to $5.8 billion, buoyed by an average realised coal price of A$215 per tonne, split between metallurgical (64%) and thermal coal (36%). The company’s focus on cost management yielded $100 million in annualised savings in Queensland alone, helping to offset the impact of weaker coal prices in the second half. Whitehaven’s cash generation remained steady at $1.3 billion, supporting a strong balance sheet with net debt of $0.6 billion and cash reserves sufficient to cover upcoming deferred acquisition payments.
Capital Management and Shareholder Returns
Whitehaven declared a fully franked final dividend of 6.0 cents per share, totaling $48 million, payable in September 2025. Complementing this, the company announced a share buy-back program of up to $48 million over six months, reflecting its updated Capital Allocation Framework targeting a payout ratio of 40-60% of underlying NPAT. This balanced approach aims to reward shareholders while maintaining operational flexibility and a strong financial position.
Strategic Capital Expenditure and FY26 Outlook
Capital expenditure guidance for FY26 has been prudently revised to $340-440 million, notably reducing the Narrabri Stage 3 Extension project capex to approximately $260-300 million from previous estimates of up to $850 million. This reflects a more conservative mine plan and deferred infrastructure investments. For FY26, Whitehaven expects managed run-of-mine coal production between 37 and 41 million tonnes, with sales guidance of 29.5 to 33 million tonnes and unit costs forecast between A$130 and A$145 per tonne.
Navigating Market Dynamics
While thermal coal prices have shown signs of recovery and metallurgical coal markets have stabilised, Whitehaven remains cautious amid ongoing trade uncertainties and supply chain disruptions. The company’s diversified portfolio, long-term offtake agreements, and disciplined operational focus position it well to navigate these challenges. CEO Paul Flynn emphasised the transition to a unified Whitehaven entity, highlighting ongoing efforts to optimise operations, improve productivity, and enhance shareholder value.
Bottom Line?
Whitehaven’s FY25 results and strategic cost management set a solid foundation, but market volatility and acquisition integration remain key watchpoints for FY26.
Questions in the middle?
- How will Whitehaven manage potential coal price volatility and geopolitical trade risks in FY26?
- What impact will the reduced Narrabri Stage 3 capex have on long-term production growth?
- How effectively can Whitehaven sustain cost reductions and operational improvements amid market cycles?
