Whitehaven shares fall after halt
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MELBOURNE, Oct 26 AAP
October 26 2012, 12:16AM
Whitehaven Coal's shares have come out of a trading halt and fallen nearly four per cent after the company said thermal coal prices had plunged to below the cost of production.
The NSW coal miner went into a trading halt on Wednesday ahead of the release on Friday of its quarterly production report for the three months to September 30.
Whitehaven also responded to speculation that chief executive Tony Haggarty wants to quit by confirming a succession plan has started but no date has been set for him to leave.
The company's shares were 11 cents, or 3.44 per cent, weaker at $3.09 at 1155 AEDT.
The trading halt followed its largest shareholder Nathan Tinkler this week demanding the board confirm if its guidance was in line with analyst consensus forecasts for earnings before interest, tax, depreciation and amortisation (EBITDA) of about $185 million.
He threatened to vote against the election of chairman Mark Vaile and four other directors at next Thursday's AGM if a detailed financial and operational update was not provided by Thursday this week, which did not occur.
The company said in Friday's report that if current coal prices and sales persisted, its EBITDA for the year would plunge to just $50 million.
The monthly index price of Newcastle standard thermal coal has from $US90 a tonne to below $US80 during the quarter, which is below "free on board" (FOB) production costs.
Whitehaven's sales are a combination of contracts at higher prices and the weaker index-spot pricing.
However offsetting that was the view that if expansion of its Narrabri mine goes ahead as planned - which was no guarantee - that should lead to a doubling of saleable production this year.
Those forecasts are for production of 7.2 million tonnes of saleable coal in the year, at an FOB cash cost of $74 per tonne, Whitehaven said.
"It is clearly difficult to have a high degree of confidence in predicting future coal prices for financial year 2013, particularly at this stage of the financial year," Whitehaven said in a statement.
"There is currently little sign of a market rebound, although forward markets are showing improving prices and there is the prospect of renewed demand growth from China in early 2013."
It posted a rise in coal production and a slight drop in sales for the first three months of the 2012/13 financial year.
Whitehaven produced 1.63 million tonnes of saleable coal in the three months to September 30, up 21 per cent from 1.35 million tonnes in the previous corresponding period.
Coal sales in the three months to September were 1.84 million tonnes, down one per cent from the previous corresponding period.
Meanwhile it responded to a report on Thursday suggested respected mining executive Mr Haggarty told directors he wanted to leave earlier this year, amid uncertainty over its ownership with entrepreneur Nathan Tinkler launching and failing in a $5.25 billion bid.
"The board holds Mr Haggarty in the highest regard. Mr Haggarty has not advised the board of a particular date for relinquishing his executive responsibilities and continues to lead Whitehaven's operations, development projects and assessment of various attractive strategic opportunities," Whitehaven chairman Mark Vaile said in the statement.