Stanmore Battles Weather and Prices, Eyes Recovery and Growth in 2H 2025
Stanmore Resources reports a challenging first half of 2025 with lower coal prices and significant wet weather impacting production and earnings, but maintains safety excellence and cost discipline while preparing for a second-half recovery and growth projects.
- Saleable production at 6.5 million tonnes, down from 6.8 million tonnes in 1H 2024
- FOB cash costs held within guidance at US$89 per tonne despite weather disruptions
- Underlying EBITDA declined to US$147 million due to lower prices and volumes
- Net loss of US$51 million reported, impacted by fixed depreciation and reduced sales
- Isaac Downs Extension project advances with environmental approvals underway
Safety and Operational Resilience Amid Weather Challenges
Stanmore Resources has delivered its half-year financial results for 2025, revealing a period marked by significant operational challenges due to unusually heavy rainfall in the Moranbah region. Despite these adverse conditions, the company achieved a zero serious accident frequency rate (SAFR), outperforming the industry average of 0.68 and underscoring its unwavering commitment to safety.
The wet weather forced adjustments to mine plans and product mixes, with production weighted towards the second half of the year as conditions improve. Notably, the company successfully completed a coal auger campaign and commissioned a new coal handling and preparation plant (CHPP) module, which contributed to record feed and production numbers in June.
Financial Performance Reflects Market and Weather Headwinds
Saleable production for the first half stood at 6.5 million tonnes, slightly below the 6.8 million tonnes recorded in the same period last year. FOB cash costs were maintained at US$89 per tonne, within the company’s guidance range, reflecting disciplined cost management despite the lower production volumes.
However, the financial impact of lower coal prices and reduced sales volumes was significant. Underlying EBITDA fell sharply to US$147 million from US$375 million in 1H 2024, driven by a 34% decline in coal sales revenue. This resulted in a net loss of US$51 million, influenced by steady depreciation and amortisation charges that are less flexible in the short term.
Balance Sheet Strength and Capital Discipline
Stanmore’s balance sheet remains robust with net debt of US$99 million and liquidity of US$401 million, providing a solid buffer amid the volatile coal price environment. Capital expenditure returned to a normalized level of US$36 million after a substantial investment phase in prior years, focusing on sustaining and growth projects.
The company continued deleveraging, repaying US$35 million in term loan principal and distributing US$61 million in dividends during the half, signaling confidence in its financial strategy despite market headwinds.
Growth Pipeline and Market Outlook
Looking ahead, Stanmore reaffirmed its full-year 2025 guidance for saleable production between 13.8 and 14.4 million tonnes and FOB cash costs within US$85–90 per tonne. The second half is expected to see a recovery in production as weather conditions ease and operational improvements take hold.
Key growth projects remain on track, with the Isaac Downs Extension identified as the highest priority. Environmental Impact Statement preparations are underway, with approvals anticipated by late 2027, paving the way for a final investment decision and subsequent development.
Market conditions remain subdued, with Australian metallurgical coal prices hovering near multi-year lows amid elevated Chinese steel exports and global economic uncertainties. However, demand growth from India’s expanding steel industry offers a promising offset, with expectations of a 10% annual increase in metallurgical coal demand over the next three years.
Bottom Line?
Stanmore’s resilience through weather and market pressures sets the stage for a pivotal second half and critical growth milestones ahead.
Questions in the middle?
- How will Stanmore’s production recovery in the second half impact full-year financial results?
- What are the key risks and timelines for the Isaac Downs Extension project’s environmental approvals?
- How might ongoing global steel market dynamics influence Stanmore’s pricing and export volumes?
