Business Description:
Whitehaven Coal Limited (WHC) develops and operates coal mines in NSW. The company operates open-cut coal mines with production capacity expected to be 11Mtpa in FY13. The mines include: the Werris Creek open-cut coal mine, 2 mines developed and operating in Rocglen and Sunnyside, near Gunnedah NSW, and others in development around NSW. The Narrabri underground project began production in 2010.

Strategy Analysis:
WHC is focused on coal production in the Gunnedah Basin including development of the Narrabri underground mine. The company hopes to be producing around 11Mtpa by FY12, but current growth is constrained by rail and port congestion. WHC has an 11% stake in the Newcastle Coal Infrastructure Group which will provide new port capacity. In the longer term, WHC will focus on extending the mine life of Werris Creek and developing the Vickery mine. Whitehaven Coal reported NPAT down 91.3% to $9.95m for the year ended 30 June 2011. This included a net loss after tax of $63.4m from significant items. Revenues from ordinary activities were $622.19m, up 52.9% from last year. Diluted EPS was 2 cents compared to 24 cents last year. The net operating cash inflow was $79.37m compared to an outflow of $39.52m in the pcp. The final dividend declared was 4.1 cents, taking the full year dividend to 7.4 cents compared with 5.6 cents last year. Looking ahead, the Company reported that strong fundamental growth in demand for both metallurgical and thermal coal remains, although supply continues to be constrained by infrastructure and regulatory issues.