WHC -11.52%: The production update from WHC finally hit the wires this morning and it was overall soft, thankfully they have a massive coal price tailwind!
– We had 5 “monthly” production updates from December 2020 thru April 2021 then an 8 week gap for this! A poor effort on timing and consistency
– Narrabri saw another downgrade by about 15%
– We also saw a miss at their smaller Gunnedah operation which came as a surprise
– Countering some of that was production at Maules Creek which was strong
More broadly, they maintained costs and sales guidance which are a positive and of course they have a very strong coal price tailwind. Peter O’Connor put this chart about today which highlights that fact and shows the huge leverage in WHC.
chart
WHC earnings … spot vs consensus vs Shaw …I think that’s called leverage Hmmm (Source Shaw & Partners)
chart
WHC earnings … spot vs consensus vs Shaw …I think that’s called leverage Hmmm (Source Shaw & Partners)
Overall, a weak update, we trimmed our position yesterday however ultimately the coal price tailwind and leverage in the WHC business means we remain overall positive, just with lower conviction given todays update & SP rally leading into it.
MM remains bullish WHC
Add To Hit List
