The Coronado Global Resources Inc (ASX: CRN) share price is plummeting on Friday after the company posted record revenue for the June quarter despite sliding coal sales.
The coal producer's shares are currently swapping hands for $1.48, 7.5% lower than their previous close.
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Coronado share price plummets alongside sales and production
Here are the key takeaways from the coal producer's June quarter:
- Record revenue of around US$1 billion – 9% higher than that of the March quarter
- Revenue for the first half came to around US$2 billion – a 147% increase on the first half of 2021
- Record realised meteorological coal price of US$321.20 per tonne – a 20.5% quarter-on-quarter increase
- Run of mine production slipped 18% last quarter to 5.5 million tonnes
- Saleable production fell 22.5% quarter-on-quarter to 3.3 million tonnes
- Sale volumes slipped 9.9% quarter-on-quarter to 3.9 million tonnes
The quarter saw Coronado post record quarterly and half-year revenue despite falling production and sales volumes.
Its average mining costs for the first half came to US$85.20 per tonne sold. That was driven higher by inflation and wet weather.
The company held US$171 million of net cash as of 30 June.
What else happened in the quarter?
The June quarter was a mixed one for the Coronado share price. It slumped 17% over the three months despite hitting a multi-year high of $2.49 in April.
Last quarter saw the company added to the S&P/ASX 200 Index (ASX: XJO) following the removal of Crown Resorts Ltd (ASX: CWN).
Coronado was also hit by a Queensland Government decision to increase coal royalties in late June. The company said it was "disappointed" by the state's move.
It estimates the royalty rate for its Curragh mine, assuming a realised coal price of US$250 per tonne, would be around 20% under the new structure. Previously, it would have been around 12%.
What did management say?
Coronado CEO Gerry Spindler commented on the results, saying:
Coronado completed the first half of 2022, achieving a number of significant milestones.
These considerable achievements were produced despite headwinds in the form of significant wet weather events in Queensland and growing global inflationary cost pressures.
As the business enters the second half of 2022, I remain extremely confident in our ability to weather these headwinds.
What's next?
Coronado also updated its guidance for the second half, a move that's also likely dragging on its share price.
It increased its expected full-year average mining costs by US$10 to between US$79 and $89 per tonne. However, it forecasts its mining costs will drop in the second half.
It also expects its full-year saleable production to come in at the lower end of its guidance range of between 18 million and 19 million tonnes.
Finally, the company believes Queensland's newly changed royalty arrangement will dint its post-tax earnings by around US$50 million, based on current spot prices.
It has a far more positive outlook for coal prices, however. While meteorological coal prices have dampened on improving supply, lessening demand, inflationary expectations, and COVID-19 lockdowns in China, the company believes they'll stay above historical averages for the rest of 2022. It also expects strong price realisations in the September quarter.
Coronado share price snapshot
Today's fall included, the Coronado share price is 15% higher than at the start of 2022.
It has also gained 48% since this time last year.
