Reuters: Hot Stocks: UPDATE 1-Australia's Whitehaven issues profit warning below forecasts

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UPDATE 1-Australia's Whitehaven issues profit warning below forecasts Jan 31st 2013, 01:35 Wed Jan 30, 2013 8:35pm EST * Annual earnings seen more than 80 pct below consensus * Coal moisture content, off-take issues hit sales * Top shareholder Tinkler under pressure * Shares slump 6 pct (Adds analyst comment, profit warning details) MELBOURNE, Jan 31 (Reuters) - Whitehaven Coal Ltd said its earnings this year would slide, hit by problems with two sales contracts, weak prices for thermal coal, and a strong Aussie dollar -- a warning sharply below market forecasts that sent its shares tumbling 6 percent. Thursday's profit warning and share price slide was a new blow to the company's top shareholder, former billionaire Nathan Tinkler, who is facing pressure from lenders to sell his 19 percent stake. Whitehaven said it expected earnings before interest, tax, depreciation and amortisation for the first half to come in at less than A$10 million and the second half to be about the same if coal markets remained where they are and the Aussie dollar remained strong. That outlook for full year EBITDA of less than A$20 million was more than 80 percent below the consensus for the year to June 2013, according to Thomson Reuters I/B/E/S. "At $1.05 for the Aussie and $95 (a tonne) for thermal coal, no one makes any money, simple as that," said Hayden Bairstow, an analyst at CLSA, who has a 'sell' rating on the stock. Whitehaven shares fell to a three-week low of A$3.23 and last traded down 6 percent at A$3.26, underperforming the broader market. Whitehaven's share of second quarter production at its mines rose 67 percent to 1.6 million tonnes, while sales rose 33 percent to 1.7 million tonnes, underpinned by the ramp-up of its Narrabri mine. It forecast full year sales would reach 7.2 million tonnes, which it said was in line with market forecasts. The company has suffered problems with moisture in coal from the Narrabri mine. That combined with two customers taking less coal than expected forced Whitehaven to sell coal into lower-priced thermal coal markets. "These issues are expected to persist into the second half of FY 2013, although Narrabri thermal coal moisture is expected to improve in Q4," the company said. (Reporting by Sonali Paul; Editing by Richard Pullin and Edwina Gibbs) Link this Share this Digg this Email Reprints

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