Yancoal reports strong quarter on higher met coal prices
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The news: Yancoal has released its report for the June quarter, in which on-track production volumes combined with a higher realised metallurgical coal price led to robust cash flows.
The numbers: Yancoal achieved an average realised coal price of $181 per tonne, about two times the cash inflow they projected for the year. This contributed a $318 million cash balance increase to the total $1.55 billion in cash held by 30 June, 2024.
The realised metallurgical coal price was 5% higher compared to the first quarter and better than the expected due to higher price carryover tonnes, product blending, and optimisation strategies. Realised thermal coal was 2% higher and in line with expectations.
Production was in line with its expectations, with Yancoal producing 10.3 million tonnes of saleable coal. This rounds out the first half of 2024 with an 18% increase in production over 1H 2023. While volumes are tracking at the lower end of the guidance range, Yancoal expects production to increase in the second half of the year, as it did in 2023.
Asia-pacific coal production is up, with Indonesia exporting 30% more coal in the first five months of 2024 than it did in the same period last year, and Australia up 12% over the same period.
The context: Coal prices have remained relatively flat in the first half of the year, though the impact of the increased thermal coal exports from Australia and Indonesia to the global market may be yet to be reflected in prices.
Yancoal also set goals to reduce injuries following a recent increase at its mines, though they still remain below the industry average.
What they said: “We see Yancoal’s large-scale, low-cost coal production profile as well suited to the current coal market conditions,” Yancoal CEO David Moult said.
The source: ASX announcement
