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Coronado up 3000 per cent in six months as coal drives huge turnaround

Miner Coronado has produced a booming second half financial result with its earnings before tax and other items up 3200 per cent compared with the first half.

Aug 09, 2022, updated Aug 09, 2022
The Curragh mine owned by Coronado. (Image: Golding)

The Curragh mine owned by Coronado. (Image: Golding)

Its net profit for the half of $US561 million ($A802 million) was up 685 per cent.

The company, which owns the Curragh coal mine in central Queensland, posted a second-half EBITDA of $US849 million ($1.2 billion) compared with a first-half of $US25.7 million.

Export shipments from both its American and Australian operations were a record in the second quarter of the  financial year and its average realised price in the second half was $US292 a tonne.

The price from Curragh alone was $US329 a tonne, an increase of 230 per cent on the first half.

The company said the market had changed so dramatically that it was going to switch some of its metallurgical coal, used for steel production, to the thermal market to meet the higher prices and demand for energy coal.

Traditionally, metallurgical coal has sold at a premium but the market for thermal has been impacted by China’s trade sanctions and the war in Ukraine.

Managing director Gerry Spindler said the second half had produced record revenue, record net income and adjusted EBITDA and distributed $US351 million in cash dividends.

“These strong results are due to higher price environment, which has resulted in record price realisations for our higher quality metallurigcal coal products, but also from the structural changes made to our business over the past 12 to 18 months,” Spindler said.

He said wet weather in Queensland had impacted its production.

“Royalty costs also significantly increased during the period due to the substantially higher coal price.”

He said the prospect of strong financial returns remains despite the metallurgical coal price dropping in the past month, but thermal coal was “at significantly elevated levels and we will divert metallurigical tonnes into thermal markets to achieve higher realisations where we have the flexibility to do so”.

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The increased profits meant Coronado paid an unfranked dividend of US7.5 cents for each CDI.

The company expects demand for metallurgical coal to grow.

 

 

 

 

 

 

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