Yancoal shares dive as board pulls interim dividend
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The news: Shares in China-controlled coal miner Yancoal dived on the ASX after the company's directors decided against paying an interim dividend despite booking a $420 million profit in the six months to June.
The numbers: Yancoal shares were down 19.7% to $5.59 by 1pm AEST.
The coal miner released its first-half results after trading on Monday, which included profit after tax of $420 million, a 57% slump year on year, and revenue of $3.12 billion, which represented a 21% fall.
Yancoal flagged that a 37% decrease in the realised coal price to $176 per tonne exceeded the benefit of a 17% increase in attributable coal sales during the period.
Yancoal started 2024 with cash of $1.4 billion, and after paying $429 million in fully franked dividends and making monthly tax payments, the company increased its cash balance to $1.55 billion by the end of June.
However, the company said "the board has not declared an interim dividend [...] with the retained cash providing flexibility for potential corporate initiatives and may be distributed in the future if not utilised".
The context: The company, which has been linked to a takeover move for BHP's Queensland coal mines, said it has a "proven history of growth through judicious acquisition and expansion" and that it is in a position to "pursue various initiatives and aim to utilise the opportunity to [the] benefit of our shareholders".
Elsewhere, Yancoal said that cost inflation is a "constant challenge" in the coal sector and mining industry, and it has responded by reinvesting its Tier 1 assets, maximising production and optimising its cost base.
The miner said coal markets appear "relatively well balanced" with seasonal and temporary supply and demand factors continuing to determine short-term price trends.
The source: ASX announcement
