The company, which owns the Isaac Plains mine in central Queensland, has marked down its underlying profit for the year based on the impacts of COVID-19 and the falling coal price as well as the expectation that there will be no coal sales in June.

The takeover target said underlying earnings (EBITDA) guidance for the full 2020 year had fallen from $92-100 million to $80-85 million.

The company said the impacts would be felt in the June quarter.

“Term customers have advised Stanmore in the past week that they will be deferring taking delivery of contracted coal shipments that they were due to take in June until later in the year,” the company said.

“This will now cause a material deferral in revenue and earnings with no sales now forecast for June, being a reduction of around 250,000 tonnes of sales which were previously expected.

“Reductions in coking coal prices with premium low volatility hard coking coal prices falling from $US163.50 a tonne in mid-March, $US118.5/t as at 24 April 20202.

“Although this recent fall in prices is significant, it will not impact the 2020 full year underlying EBITDA materially, given the company sells largely on contract prices which are 50 per cent set for the June quarter.

“As a result of fewer tonnes being sold as well as measures put in place by the company and its suppliers to manage the impacts of COVID-19, unit costs per tonne are expected to increase slightly above guidance of $A107 a tonne sold, ex royalty, to A$109/tonne sold.

Production guidance for the full year remains on track at 2.35 million tonnes.