- Bathurst Resources (BRL) reaps the benefits of strong coal prices as it upgrades its 2021 financial year earnings guidance
- The coal producer downgraded its earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance in January this year
- However, with the price of premium low-volume hard coking coal spiking in recent months, Bathurst now says it will exceed its January guidance figure
- Bathurst says with full-year EBITDA guidance for the 2022 financial year will be announced with 2021 final results in July
- Shares in Bathurst closed 16.13 per cent higher on the back of today’s news, trading at 36 cents each
Bathhurst Resources (BRL) is reaping the benefits of strong coal prices, announcing today it will exceed its earnings guidance for the 2021 financial year.
The New Zealand coal producer downgraded its full-year earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance from $62.1 million to $55.4 million back in January. The company blamed muted export prices on the back of the COVID-19 pandemic for the downgrade.
However, Bathurst told investors today it will now exceed this revised $55.4 million target on the back of a sudden price recovery.
Premium low-volume hard coking coal (HCC) spiked from US$110 (A$145) per tonne earlier this year to a recent high of US$182 (A$240) per tonne — an increase of over 65 per cent.
Interestingly, Bathurst said it also benefitted from strong market demand for coking coal, despite lower prices enduring for longer than expected.
As such, the price hike and ongoing demand have delivered an improved financial outcome for Bathurst over the second half of the financial year, hence the guidance upgrade. The company said it will provide a final guidance update once export sales are finalised with June shipping volumes.
“Following the challenge of the COVID-19 pandemic and market disruption from
the Chinese ban of coal imports from Australia, we continue to show that we have a reliable and repeatable business,” Bathurst CEO Richard Tacon said.
“The confirmation of the EBITDA guidance reflects the robust pricing environment for a premium product in our export markets.
“It also highlights that our operations have continued to perform exceptionally well”
Bathurst said its strong second-half financial performance was also driven by the company’s “successful strategy” of using foreign exchange and coal price hedging for its export sales.
The company will keep using this strategy in the 2022 financial year, Bathurst said, with full-year EBITDA guidance for the next financial year to be announced with 2021 financial year final results in July.
Shares in Bathurst closed 16.13 per cent higher on the back of today’s news, trading at 36 cents each.