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Whitehaven Falls on Concern Rains Will Erode Profit
By Rebecca Keenan - Dec 23, 2010 8:50 PM MT


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Whitehaven Coal Ltd., an Australian producer of the fuel, fell the most in a month after saying wet weather will erode first-half earnings.
The Sydney-based company’s shares declined 1.9 percent to A$6.87 at the close in Sydney on the Australian stock exchange. That’s the biggest drop since Nov. 23.
Production will be 24 percent, or about 700,000 metric tons, less than forecast in the six months ending Dec. 31, Whitehaven said today in a statement. As a result, the company will have to buy 1 million tons to meet contracts, it said.
“The need to purchase additional coal, particularly at a time when coal availability is generally low as a result of the wet weather and prices are rising, will have a significant negative impact on first-half earnings,” the company said. It didn’t give any numbers.
Australia had its wettest September-to-November spring on record, and the Bureau of Meteorology says southeastern Queensland and eastern New South Wales have a 60 percent to 70 percent chance of getting above-average falls during January to March. Xstrata Plc and Vale SA are among producers who were forced to suspend coal sales this month because of the deluge.
Whitehaven reported first-half profit of A$83.47 million ($83.68 million) last year. It may report earnings of A$60.9 million this half, according to the mean of two analyst estimates compiled by Bloomberg.
To contact the reporter on this story: Rebecca Keenan in Melbourne [e-mail]