WHC - Whitehaven Coal

[finicky]

From Market Matters.
'The match out' after market close today:

• Coal Stocks rallied after coal producer Anglo American suspended operations at its Grosvenor plant in Queensland due to a fire, saying it will take several months to come back online.
• Coronado (CRN) +8.86% the major beneficiary given Anglo’s issues relate to Met Coal assets while Whitehaven (WHC) +6.27% and New Hope (NHC) +4.51% also rallied.

 

[finicky]

'Market Matters' today. They also like New Hope (NHC) as a "yield play".

Whitehaven Coal (WHC) $8.13

Following the $US3.2bn purchase of BHP’s Blackwater and Daunia coal mines, WHC has strategically pivoted primarily to a coking/met coal producer, which will account for ~70% of its revenue, spread across NSW and QLD. Given supply constraints and a strong demand outlook driven by India, we are increasingly bullish on the met coal outlook. We believe the good times will return as WHC pays down debt and benefits from increased global energy demand – as we keep saying, remember the power requirement of AI. We have been bullish on WHC throughout 2024, and recently, we’ve been looking for the miner to make fresh 12-month highs; this time, our “Gut Feel” feels increasingly on point. We are initially targeting a test of $9 by WHC – MM is long WHC in our Active Growth Portfolio.

 

[divs4ever]

NHC is a bit more diversified than you would expect

an oil producing subsidiary , port facilities , an agribusiness on rehabilitating land as examples

 

[finicky]

From 'Market Matters' weekend Q&A
Comment has more general relevance but I haven't found a more apposite thread:

"At MM, we haven’t hidden our view that these two sectors (energy and materials) are set to outperform through FY25. However, we’re very conscious that one week doesn’t change a trend—the previously high-flying tech and utilities sectors were the market’s worst-performing sectors last week.

Winners:
Whitehaven Coal (WHC) +17.3%, Magellan (MFG) +12.8%, Mineral Res. (MIN) +7.9%, IGO Ltd (IGO) +5%, South32 (S32) +4.4%, Paladin +4.3%, Sandfire (SFR) +4%, BHP Group (BHP) +4%, Evolution Mining (EVN) +4%, and Woodside (WDS) +3.7%.

Losers:
Pro Medicus (PME) -8.6%, NIB (NHF) -5%, Seek (SEK) -5%, Lovisa (LOV) -4.8%, IDP Education (IEL) -4.6%, CAR Group (CAR) -3.8%, Suncorp (SUN) -3.5%, Wisetech (WTC) -3.1%, Cochlear (COH) -3%, and Pilbara (PLS) -2.3%."

 

[divs4ever]

From 'Market Matters' weekend Q&A
Comment has more general relevance but I haven't found a more apposite thread:

"At MM, we haven’t hidden our view that these two sectors (energy and materials) are set to outperform through FY25. However, we’re very conscious that one week doesn’t change a trend—the previously high-flying tech and utilities sectors were the market’s worst-performing sectors last week.

Winners:
Whitehaven Coal (WHC) +17.3%, Magellan (MFG) +12.8%, Mineral Res. (MIN) +7.9%, IGO Ltd (IGO) +5%, South32 (S32) +4.4%, Paladin +4.3%, Sandfire (SFR) +4%, BHP Group (BHP) +4%, Evolution Mining (EVN) +4%, and Woodside (WDS) +3.7%.

Losers:
Pro Medicus (PME) -8.6%, NIB (NHF) -5%, Seek (SEK) -5%, Lovisa (LOV) -4.8%, IDP Education (IEL) -4.6%, CAR Group (CAR) -3.8%, Suncorp (SUN) -3.5%, Wisetech (WTC) -3.1%, Cochlear (COH) -3%, and Pilbara (PLS) -2.3%."

it will be interesting to see how WHC integrates those coal mines it bought off BHP , and compare it to WDS ( who bought a petroleum arm off BHP )

interesting times ahead i suspect

 

[finicky]

Some discussion of coal stocks here including some Macquarie and Morgan Stanley comments. Particularly WHC at 17.20 where MS goes shock and awe with one scenario of coal prices supported by Indian infrastructural demand that sees WHC out of debt by end FY25 and with $3.8Bn cash by end FY26, all while holding divs constant, which would make the shares then worth $15.30!

Held
Holding

 

[finicky]

Picked up 1,000 WHC @ 8.00
Now looking at an NHC add.
NOT ZERO (Greg Canavan)

Held
Holding

 

[DrBourse]

Hmmmmmm

 

[divs4ever]

View attachment 181272
View attachment 181273
Hmmmmmm

sigh ! my top up target is around $1.40

i guess i will watch with amusement from the sidelines

( i hold WHC )

DIVIDEND TYPE	DIVIDEND AMOUNT ($)	FRANKED	EX-DIV DATE	PAY DATE
Interim	0.070	100.00%	22/02/2024	08/03/2024
Final	0.420	100.00%	31/08/2023	15/09/2023
Interim	0.320	100.00%	23/02/2023	10/03/2023
Final	0.400	100.00%	01/09/2022	16/09/2022
Interim	0.080	0.00%	24/02/2022	11/03/2022
Interim	0.015	0.00%	27/02/2020	06/03/2020
Final	0.300	21.00%	05/09/2019	19/09/2019
Interim	0.200	0.00%	25/02/2019	06/03/2019
Final	0.270	0.00%	04/09/2018	13/09/2018
Interim	0.130	0.00%	23/02/2018	02/03/2018
Final	0.060	0.00%	10/11/2017	28/11/2017

sure the divs. have been lumpy ( unreliable ) the franking uneven but my av. share price is just under $1.40 ( ignoring the fact i have rescued the investment cash three times over ) , i have got my entry price in divs. alone in the last six years

but many thanks to those who declared 'coal is dead ' , it convinced me to use the current strategy ( let the profits run as long as they can )

 

[finicky]

Impulse add of 1,000 shares of WHC this arvo.
Basically just shut my eyes and pushed the buy button for some retail therapy. It's a bargain anyway imo but also in the opinion of Greg Canavan of fat tail research advisory.

Strange flaccid chart not inspiring confidence. But over the last year higher highs and lows, albeit overlapping and phlegmatic.

Held
Holding

WEEKLY

 

[finicky]

Impulse add of 1,000 shares of WHC this arvo

Lol, what the fu..?
I'm like an eagle with these fossil fuel stocks.

Held

10 day 5 minute chart

 

[finicky]

Bid in for 500 more @ 7.31

 

[qldfrog]

same here, added a buy on market will see what I get

 

[finicky]

Picked them up.
Only a 5 minute chart but at least improved on that scale.
The FY24 Results coming up though. Was on 24 Aug last year.
More a perceived medium-long term value buy for me.

5 minute chart

 

[qldfrog]

Picked them up.
Only a 5 minute chart but at least improved on that scale.
The FY24 Results coming up though. Was on 24 Aug last year.
More a perceived medium-long term value buy for me.

5 minute chart
View attachment 182629

Same here, long term holding

 

[divs4ever]

have held them since 2013 .. those d*mned Greenies sometimes do a little good , for bold investors

 

[finicky]

Whitehaven Coal to cut 192 jobs at mines purchased from BHP​

Published Aug 16

By Rishav Chatterjee
(Reuters) -Australia's Whitehaven will cut 192 jobs at the Daunia and Blackwater coking coal mines it took over from global miner BHP Group (NYSE:BHP), its spokesperson told Reuters on Friday, adding to a slew of roles lost in the resources sector this year.
Whitehaven had announced plans in October to buy out BHP's Blackwater and Daunia mines in a $4.1 billion deal. It completed the acquisition in April this year.
"This proposed new structure will remove duplication of roles, consolidate teams where logical, minimise unnecessary layers of complexity, and support a clear delineation of roles and responsibilities between site and functional teams," a spokesperson for the country's largest independent coal miner said in an email to Reuters.
Whitehaven will cut 91 roles across the Daunia and Blackwater operations while reducing 101 contractor and labour hire roles, the spokesperson added.
The job cuts are likely to impact the relationship between Whitehaven and the workers it transferred over from BHP during the acquisition. In November, the workers had accused the company of not providing them with benefits after the transition, the Australian Financial Review reported.
BHP had nearly 3,000 roles affected after it decided to temporarily suspend the Western Australia nickel business recently.
Miner Alcoa (NYSE:AA) also cut more than 1,000 jobs after it decided to shut down Kwinana alumina refinery earlier in the year.

The firm is currently in the process of selling down a 20% stake in the Blackwater mine. Reuters reported in February that India's JSW Steel is interested in the deal."

 

[finicky]

Massive drops in everything except production and the price is up 5% in first hour?
And that's with one Quarter of added contribution from Daunia and Blackwater mines - the acquisitions from BHP.
Revenue chopped almost in half so I guess the biggest factor is reduced coal prices YoY. Next would be the costs of the acquisitions.
They've been able to flog off 30% of Blackwater to two non Chinese jv partners for US$1.1B which I suspect is less than many were estimating?

Held

 

[finicky]

Obtuseness from me. It seems that a lot of the positive market response is due to the added news in the FY24 report of the sale and an offtake agreement for 30% of Blackwater. Apparently the sale price has exceeded expectations and is not "less than many were estimating", as I said. Whitehaven is getting US$1.1B for 30% and the upper range of expectations by observers was US$500m for 20%. Plus the offtake is being taken as a positive.

As a guide to prior expectations this excerpt is from the 'Mining Safety Journal' two months ago:

"Whitehaven Coal is understood to be targeting August [2024] for an announcement surrounding a selldown of a stake in its Blackwater coal mine that it purchased as part of a broader A$6.4B acquisition from BHP,” News Limited reported.

“The company has signalled it was in talks with suitors to buy about 20 per cent of the mine but may sell down a larger holding.”

Two potential buyers from Japan and one from India were speculated to be deciding whether to acquire the stake at the time of publication.

If a 20 per cent selldown at Blackwater is successful, the deal is widely speculated to fetch up to US$500 million (A$760M). The money could be used to help establish a joint venture business model."

 

[divs4ever]

Massive drops in everything except production and the price is up 5% in first hour?
And that's with one Quarter of added contribution from Daunia and Blackwater mines - the acquisitions from BHP.
Revenue chopped almost in half so I guess the biggest factor is reduced coal prices YoY. Next would be the costs of the acquisitions.
They've been able to flog off 30% of Blackwater to two non Chinese jv partners for US$1.1B which I suspect is less than many were estimating?

Held

View attachment 182973

yes , but it probably crushed the outstanding debt for the acquisition

and maybe the market liked that

( still way above my top-up range , but am not so unhappy )