Australia's Whitehaven Coal (WHC.AX) reported a steep decline in its annual profit on Thursday and said it will allocate more capital for shareholder returns while reducing its provision for the Narrabri Stage 3 extension project in New South Wales.
As of 0027 GMT, shares of Whitehaven Coal, Australia's largest independent coal miner, were down more than 4% at A$6.160, their lowest point in a month. Whitehaven's stock ranked among the top losers in the ASX 200 benchmark index (.AXJO), even as the broader index rose 0.5%.
Whitehaven now plans to return 40% to 60% of its annual underlying profit to stakeholders through dividends and share buybacks, higher than its previous payout ratio of 20% to 50%.
In fiscal 2025, the miner plans to return 60% of its underlying earnings, up significantly from 22% last year, through a combination of a final dividend of 6 Australian cents per share and share buybacks.
The boost in shareholder returns accompanies a reduction to funding for the Narrabri Stage 3 extension in New South Wales, with the budget now trimmed to between A$260 million and A$300 million, down from an earlier estimate of up to A$850 million.
Whitehaven said that the revised plan eliminates the requirement for complex underground tunnels and related infrastructure, while postponing the purchase of a new longwall mining system for more than a decade. This approach frees up cash to support steadier shareholder returns.
"The capital allocation framework is intended to reward shareholders while maintaining and optimising operations, retaining a strong balance sheet through the cycle," the coal miner said.
However, fiscal 2025 profit was pressured by slightly lower realised coal prices, which fell 6% to A$215 per ton year-on-year, along with increased cost of sales.
This pushed the coal miner's underlying post-tax earnings to A$319 million ($205.18 million) for the year ended June 30, sharply down from last year's A$740 million. However, it comfortably beat Visible Alpha's estimate of A$261.1 million.
($1 = 1.5547 Australian dollars)
