Why Did Stanmore Resources Swing to a $50.5M Loss in H1 2025?

Financial Performance Under Pressure

Stanmore Resources Limited has revealed a sharp reversal in its financial fortunes for the six months ended 30 June 2025, posting a net loss after tax of US$50.5 million compared to a US$136.3 million profit in the same period last year. The decline was primarily driven by a 29% drop in revenue to US$867.2 million, reflecting a significant fall in the average realised coal price from US$175 to US$132 per tonne and a modest reduction in sales volumes.

The company’s underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) also contracted sharply by 61% to US$146.8 million. Despite efforts to reduce costs, including a slight decrease in cash costs per tonne sold, the lower pricing environment and weather-related production disruptions weighed heavily on profitability.

Operational Challenges and Weather Impact

Operationally, Stanmore faced significant challenges due to severe wet weather in Queensland’s Bowen Basin, with rainfall reaching nearly 600mm by April, close to the region’s five-year annual average. This led to a reduction in run-of-mine coal production and saleable coal volumes, further pressuring revenue. The company produced 9.2 million tonnes of run-of-mine coal and 6.5 million tonnes of saleable coal, down from 9.4 million and 6.8 million tonnes respectively in the prior period.

Capital expenditure was scaled back to US$36.3 million, down from US$106 million in the prior comparable period, following the completion of several major projects. This conservative approach reflects a focus on operational resilience amid market uncertainty.

Strategic Acquisition and Regulatory Hurdles

During the period, Stanmore completed the acquisition of the Eagle Downs Joint Venture, consolidating full ownership of the project. The company paid US$25.2 million in stamp duty related to this acquisition but has formally objected to the Queensland Revenue Office’s assessment, preserving its right to appeal. This dispute adds an element of regulatory uncertainty to the company’s near-term outlook.

Safety and Sustainability Initiatives

On a positive note, Stanmore reported a marked improvement in safety performance, achieving a zero serious accident frequency rate over the past 12 months, well below the industry average. The company also advanced its decarbonisation efforts, partnering with Idemitsu Kosan Co. Ltd and Terviva Inc to establish a 50-hectare Pongamia plantation aimed at producing renewable fuels and supporting carbon sequestration.

Despite the challenging half, Stanmore did not declare an interim dividend post-period, reflecting prudence amid ongoing market pressures.

Looking Ahead

Stanmore’s management remains focused on cost control, operational stability, and navigating regulatory complexities while pursuing sustainability initiatives. The company’s ability to adapt to volatile coal markets and weather disruptions will be critical as it moves into the second half of 2025.