Record prices boost debt-free Whitehaven CoalWhitehaven Coal...

Record prices boost debt-free Whitehaven CoalWhitehaven Coal managing director Paul Flynn. Picture: John Feder/The Australian.NICK EVANSRESOURCE WRITER4 MINUTES AGO APRIL 20, 2022NO COMMENTSWhitehaven Coal says the chances of a “structural shift” in the coal market is rising, due to Russia’s invasion of Ukraine, potentially extending thermal coal’s extraordinary price recovery.Record coal prices in the March quarter boosted Whitehaven Coal’s bank balance, with the company finishing March debt free with $161m in cash after recording an average coal price of $315 a tonne for the quarter – more than triple its average received price a year ago.Whitehaven had net debt of $808.5m at the end of last financial year, but coal’s stunning run over the last nine months has allowed Whitehaven to pay off its entire debt and return $147m to shareholders in the March quarter, with the company paying $80m in dividends and buying back $67m of its own shares.READ NEXTLIVE: TRADING DAYASX up; Ramsay surges; Santos buybackVALERINA CHANGARATHIL, LILLY VITOROVICHWhitehaven sold 4.4 million tonnes of coal in the March quarter, up 5 per cent on the same period in 2021, with the company’s operations largely unaffected by the heavy rainfall in NSW that flooded large parts of the state.“The impacts of the coastal rainfall events on Whitehaven was limited to short periods of rail disruption and some disruption to planned shipping movements at the Port of Newcastle due to high seas and ‘freshwater’ conditions in the harbour,” the company said.While the performance of Whitehaven’s operations improved in the March quarter, managing director Paul Flynn said the company still suffered from the impact of the coronavirus pandemic and ongoing skills shortages.“A tight labour market, Covid-related absenteeism, and wet weather events slowed operations and disrupted rail and port activities. “Despite this drag on production and sales, we are on track to deliver FY22 guidance,” he said.Whitehaven received an average $US229 a tonne for its thermal coal sales, and $US244 a tonne for metallurgical coal, compared to an average thermal coal benchmark price of $US264 a tonne for the quarter.“Whitehaven achieved an average price of $A315 a tonne for sales of produced coal during the quarter, 212 per cent higher than the prior corresponding period, and a record outcome,” the company said.“In the June quarter, further upside in realised pricing is expected as the March quarter realised price was at a 13 per cent discount to the gC NEWCprice of US$264/t (15 per cent discount in the December quarter) reflecting the rapid escalation of the index and associated lag due to price mechanisms and shipping queues.”New & improved business newsletter. Get the edge with AM and PM briefings, plus breaking news alerts in your inbox.Sign upBenchmark thermal coal prices averaged only $US89 a tonne in the first three months of 2021, and metallurgical coal was worth an average of only $US92 a tonne. Whitehaven was paid only $US76 a tonne for its thermal coal shipments in the period, and $US92 – or $A101 a tonne on average for the period.Whitehaven said its realised pricing was rising as customers for Russian coal were looking elsewhere for new sources of supply after Russia March invasion of Ukraine.“While uncertainty remains whether the response to Russia’s actions in Ukraine will see a temporary or sustained shift in the high CV coal market, the potential is growing for structural change to occur,” Whitehaven said.“Replacement sources for Russian high CV coal supply are not readily identifiable with increasing potential for coal prices to find new highs for longer.”Whitehaven shares were up 0.4 per cent in mid-morning trade, at $4.67.