Hi Mohamed,
We remain long and bullish towards coal over the coming years believing that the transition to green energy will be a tougher/longer journey than many both hope and believe. The NSW government arguably echoed this view on Wednesday as they imposed a $2.7bn coal royalty tax hike, up 2.6% from July 24 which came a day after they extended a possible lifeline to the states largest coal-fired station to operate for longer.
- We always thought the tax was coming but its not too onerous and now relative certainty has returned.
Initial estimates are the tax will shave ~6.2% from WHC’s earnings before tax and depreciation.
In terms of WHC it has struggled from its Q4 2022 highs but we shouldn’t forget the strong rally from its 2021 lows and the $1.22 in fully franked dividends its paid along the way.