ASX-listed Whitehaven Coal Limited (AU:WHC) announced the sale of a 30% stake in the Blackwater mine in Queensland for $1.08 billion, along with its FY24 results. The company signed separate agreements with Japanese firms Nippon Steel (JP:5401) and JFE Steel (HK:5411) for 20% and 10% stakes, respectively. Whitehaven shares traded up by 6.25% in today’s session.
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Whitehaven Coal specializes in the production of metallurgical and thermal coal.
Whitehaven Reveals Details of the Blackwater Sale
As part of this deal, Blackwater mine will be jointly owned by Whitehaven, Nippon Steel, and JFE Steel through an unincorporated joint venture, with Whitehaven managing the venture. The company has also secured supply contracts with Nippon Steel and JFE Steel, who are long-term buyers of coal from the mine.
The transaction is subject to regulatory approval and is expected to be finalized by the first quarter of 2025.
The company stated that the funds from the stake sale would strengthen its balance sheet. Whitehaven acquired the Blackwater mine in April 2024 from BHP Group (AU:BHP) and Japan’s Mitsubishi (JP:8058).
Whitehaven Reports FY24 Results
The company reported a decline of 72% year-over-year in its underlying NPAT (net profit after tax) of AU$740 million in FY24. Meanwhile, its revenues fell by 37% year-over-year to AU$3.8 billion.
Additionally, the company declared a final dividend of 13 cents per share, significantly lower than last year’s payment of 42 cents.
On the bright side, the company’s run-of-mine (ROM) production reached 24.5 million tonnes, an increase from 18.2 million tonnes in FY23.
Is Whitehaven Coal a Good Share to Buy?
According to TipRanks’ analyst consensus, WHC stock has received a Strong Buy rating based on eight Buy and two Hold recommendations. The Whitehaven share price forecast is AU$9.17, which is around 20% above the current price level.
