Whitehaven Coal (ASX:WHC) executives said the company delivered a “good first half” of FY2026 despite wet weather and softer coal prices, highlighting strong operational performance, cost progress and a continued focus on balance sheet strength during the company’s half-year results call.
Safety and compliance
Managing Director and CEO Paul Flynn opened the call by pointing to safety and compliance as key achievements for the six months. Total recordable injury frequency rate (TRIR) was 2.9 for the period, which Flynn described as “an excellent result,” noting the full-year figure previously ended at 4.6. The company also reported no enforcement action events over the past six months, which Flynn said was notable given weather variability, particularly in Queensland.
Operational performance and pricing
At a group level, Whitehaven’s average realized price was AUD 189 per tonne, including AUD 212 per tonne in Queensland and AUD 168 per tonne in New South Wales. Management said coal prices were softer through the half but improved toward the end of the period, with Flynn noting that both metallurgical coal (referencing PLV) and thermal benchmarks improved after the half-year end. He characterized recent price moves as influenced in part by weather-related supply concerns in Queensland, including a spike in PLV to around $250 that later eased.
Flynn said demand from customers remained firm, adding that customers were “wanting the coal” and that the company was also seeing customers take option tonnes.
Financial results and capital returns
Whitehaven reported revenue of AUD 2.5 billion, with a sales mix of 54% metallurgical coal and 46% thermal coal. Flynn said thermal was a stronger component in the first half due to strong production and sales from New South Wales operations, including Narrabri.
Underlying EBITDA for the half was AUD 446 million. The company recorded an underlying net loss of AUD 19 million, while statutory net profit after tax was AUD 69 million. CFO Kevin Ball walked through the reconciliation, citing group depreciation and amortization of AUD 336 million, underlying net finance expense of AUD 135 million (largely interest on the AUD 1.1 billion term loan used to acquire Blackwater and Daunia), and non-recurring items totaling AUD 88 million. Ball said the largest non-recurring component related to resetting deferred contingent expectations payable to BMA due to price movements, and also referenced a technical tax accounting item related to recognition of deferred tax liability associated with the Blackwater sell-down.
The board declared an interim fully franked dividend of AUD 0.044 per share and committed to a share buyback of up to AUD 32 million over the next six months. Flynn acknowledged that paying a dividend in a half where the company posted an underlying loss would likely place the full-year payout ratio at the top end of the policy range, or slightly above, but said the decision reflected balance sheet strength and improving market conditions. In Q&A, Flynn emphasized the interim dividend was not considered “special,” and that payout ratios are assessed on a full-year basis.
Ball also addressed confusion around the buyback structure, saying the company will now announce buyback limits on a six-month basis and close prior programs to reduce uncertainty in investor models.
Costs, guidance and refinancing priorities
Management highlighted progress on costs. For the half, the group reported unit cash costs of AUD 135 per tonne, at the bottom end of guidance (AUD 130 to AUD 145 per tonne). Ball said costs were affected by higher vessel queues at ports and that strong production in the second quarter meant some low-cost production was held in coal stocks at 31 December, which he said should unwind in the second half. He also noted the mix of sales was more weighted to New South Wales in the half and included fewer Blackwater tonnes following the sell-down.
Flynn reiterated the company is targeting AUD 60 million to AUD 80 million of cost reductions by year-end, describing initiatives across organizational alignment, maintenance strategies, equipment deployment, tire performance, and resetting contracting arrangements.
Whitehaven also reset its Queensland five-year FOB cost estimates for the 2024–2028 period to AUD 140 to AUD 145 per tonne. Flynn said inflation added roughly AUD 10 per tonne versus prior estimates, and outlined a mix of temporary and more permanent cost drivers. Temporary factors included rebuilding stripped inventory, elevated dragline rehandle while strip inventory is rebuilt, a backlog of maintenance requiring major shutdowns on large equipment, and autonomous haulage system (AHS) productivity running below initial assumptions. More permanent factors included higher labor costs tied to “Same Job, Same Pay” and higher demurrage, with management saying Queensland logistics are less efficient than the New South Wales chain. Flynn said some headwinds could persist for “another couple of years,” but the company expects costs to be higher in the earlier years of the five-year period and lower toward the end.
On New South Wales, management did not provide a medium-term cost outlook comparable to Queensland, but pointed to Narrabri’s strong contribution as a driver of lower average costs when production is strong. Ball also noted Maules Creek is underweighted in the first half versus the full-year profile.
Ball said a new above-rail haulage contract in New South Wales will begin in July and is expected to save about AUD 3 per tonne for that business (Flynn said that equates to about AUD 1.50 per tonne at the group level). Management said it has also started work on a similar renewal process in Queensland, where a contract renewal is expected in roughly 18 months.
Balance sheet metrics were described as conservative. Net debt at 31 December 2025 was AUD 710 million, with liquidity of AUD 1.5 billion. Ball said Whitehaven has reserved AUD 500 million of cash on deposit for the second payment to BMA due on 2 April. He also discussed contingent payments linked to coal prices, saying Whitehaven paid $9 million to BMA in July and estimated the current amount calculated as owing at about $20 million, which is rising with prices.
Refinancing the AUD 1.1 billion acquisition term loan was a key Q&A theme. Ball said Whitehaven has been working on the refinancing for “six or eight months,” with the first call period around 12 March and an expectation to refinance before 30 June. He said he would be “okay” with a refinancing rate beginning with a “7 handle” and “delighted” with a “6 handle,” framing that as potentially 300 basis points lower than the current cost and implying $30 million to $40 million in annual savings. He added that inbound lender interest has been strong and that ESG-related constraints appear to be abating compared with prior years.
Whitehaven maintained its guidance and said it is tracking well against production and cost ranges, while noting weather remains a key variable for the second half.
About Whitehaven Coal (ASX:WHC)
Whitehaven Coal Limited develops and operates coal mines in New South Wales and Queensland. It operates through three segments: Open Cut Operations, Underground Operations, and Coal Trading and Blending. The company produces metallurgical and thermal coal. It operates four mines, including three open cut and one underground located in the Gunnedah Coal Basin in New South Wales. The company sells coal in Japan, Korea, Taiwan, Malaysia, New Caledonia, Vietnam, Indonesia, Europe, and internationally.
