INCOMING Whitehaven Coal managing director Paul Flynn has reiterated his independence from the company's largest shareholder, former billionaire Nathan Tinkler, who once employed him.
At Whitehaven's interim results briefing on Tuesday, UBS's chief mining analyst Glyn Lawcock questioned the appointment of Mr Flynn, a non-executive director who previously ran Mr Tinkler's Aston Resources, to replace retiring boss Tony Haggarty.
Mr Flynn, who joined the Whitehaven board at the time of last year's merger with Aston, said he was employed by Mr Tinkler until September 29 and since that time he had "no employment or other relationship with Tinkler Group".
Mr Flynn repeated comments he made at Whitehaven's annual meeting last November - when Mr Tinkler voted his 19.4 per cent stake against all resolutions put, including the re-election of Mr Flynn, his own nominee to the board - to the effect that he served as an independent in the interest of all shareholders.
Whitehaven reported a net loss of $47 million in the December half when it was hit by a combination of weaker coal prices, the continuing high dollar, and a series of setbacks including a train derailment at Boggabri and delays to the approval of its controversial Maules Creek project in the Gunnedah Basin. Shares in Whitehaven, which reported a $19.9 million profit in the previous corresponding period, closed down 3 per cent at $2.91 on Tuesday.
Mr Haggarty did not say when he believed coal prices would recover and said under present market conditions the second half would deliver a "very similar" earnings outcome.
Whitehaven's average realised coal prices fell to $US92 a tonne from $US108 in the previous corresponding period.
Mr Haggarty said high take or pay charges - for ports and rail services - would be "with us for some time" and would probably increase in the short term. Merrill Lynch mining analyst Peter O'Connor said Whitehaven's profits were "woeful" and would need to rise above $300 million a year to justify the current share price.
Deutsche Bank's Paul Young said using multiples of short-term earnings Whitehaven's valuation was "extremely stretched" but based on a discounted cash flow, and given its asset quality, the company was "extremely undervalued".
Looking through the commodity cycle, Mr Young said once Narrabri was in full production, and Maules Creek was up and running from fiscal 2015, the earnings potential of Whitehaven's asset base was "very high". But Mr Young said the earnings impact of the Narrabri underground would not be felt until the December 2013 half-year.