TWO major coal exporters, Yancoal and Whitehaven, have both suffered major falls in profit due to coal price falls as the coronavirus shuts down industry world wide.
But both are confident that their fortunes will rebound if the impacts of COVID-19 can be reduced.
There are no signs, however, of prices rising in the short term, with Australian Coal Report quoting high-quality 6000 kilocalorie (kc) coal at under $US47 ($64) a tonne last week, down from $US64 ($87) a year ago.
High-ash 5500 kc coal of the sort usually sold to China was priced at $US35.30 ($48) a tonne, down from $US49.40 ($67.25 a year ago).
Yancoal recorded half-year pre-tax earnings of $95 million on revenues of $1.97 billion for the six months to June 30, compared with earnings of $646 milion on revenues of $2.35 billion in the first half of 2019.
Whitehaven - which operates the controversial Maules Creek open cut in western NSW - recorded a full year profit of $30 million from $1.72 billion in revenue, compared with $564 million in profit and $2.49 billion in revenue in the 2019 financial year.
At a summit on Friday, tech billionaire and co-founder of Atlassian, Mike Cannon-Brookes, was on a panel with Energy Minister Angus Taylor and Labor front-bencher Joel Fitzgibbon when he predicted that coal jobs would be gone within 20 years as the world moved to renewables.
Against this, International Energy Agency forecasts show coal production would still be at about 35 per cent of present levels in 2040 under the most aggressive conversion to renewables, known as the Sustainable Development Scenario.
Whitehaven's financial results list climate change as a risk relating to the company's future prospects, with an update on the subject due in its 2020 sustainability report to be published later in the year.
Mr Cannon-Brookes said Whitehaven was "down 75 per cent", an apparent reference to its share price, which was 93 cents yesterday, compared with its June 2018 peak of more than $5.60 a share.
But that peak followed a February 2016 trough of 41 cents, after an April 2011 peak of $7.20 - a series of movements closely aligned with the price of coal.
Yancoal shares were trading at just above $2 yesterday, compared with $3 in August last year.
Both Whitehaven and Yancoal are adamant that much of the coal market decline is COVID-related.
Yancoal chief executive David Moult said when delivering the half year results that prices were down 20 per cent to 25 per cent, with little change in the $A/$US exchange rate (a weaker $A boosts returns for products sold in $US).
He said Yancoal averaged $94 a tonne for its coal in the six months to June 30, compared with $124 a tonne for the first half of 2019.
"The Yancoal team will continue to operate the assets efficiently and to strategically position the group for the next upswing in the coal price cycle," Mr Moult said.
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