Whitehaven warns of H1 earnings slide

Whitehaven Coal has warned its first half earnings could slump to less than $10 million as weak coal markets and the high Australian dollar take their toll.

Whitehaven's warning came as it reported run-of-mine (ROM) coal production for the December quarter rose 96 per cent to 2.367 million tonnes (Mt) from the previous corresponding period.

But despite the production rise, Whitehaven expects its first half earnings before interest, tax, depreciation and amortisation (EBITDA) will be less than $10 million.

It expects a similar result for the second half if coal markets and the high Australian dollar remain unchanged.

The company said weak coal markets and the strong Australian dollar had depressed its first half revenues.

"Whitehaven is committed to driving down costs and improving efficiencies and a key focus for management will be the continuation of reducing mine operating costs and overheads and extracting operational savings and efficiencies in the face of continuing low coal prices and the high Australian dollar," the company said in a statement on Thursday.

Whitehaven also flagged its first half net profit would be hit by a writedown of low-value coal inventory at its Sunnyside Mine, near Gunnedah in northern NSW.

The mine was placed on care and maintenance last October, shortly after Whitehaven received NSW government approval to develop one of the world's biggest open-cut coal mines at nearby Maules Creek.

Whitehaven also expects to make writedowns associated with a derailment of a freight train at Boggabri, which disrupted operations at the nearby Narrabri coal mine last December.

While Whitehaven is still awaiting federal government approval for its Maules Creek mine, it still expects to sell its first coal from the mine in mid calendar 2014.

"Despite the current weakness in coal markets, Whitehaven intends to bring the mine into operation as soon as possible," it said.

Meanwhile, Whitehaven said the delays to ramping up production at Narrabri and Maules Creek meant it had surplus port and rail track capacity for this financial year and next.

Whitehaven shares were 11 cents, or 3.5 per cent, lower at $3.35 at 1104 AEDT.

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