Universal Coal Increases Financial Outlook to $70 million

Universal Coal is a mid-tier coal mining company with on going projects in South Africa. 

Universal Coal (ASX:UNV) has announced that the company is expected to exceed the updated EBITDA guidance released to market in January 2018. Universal Coal is a mid-tier coal mining company with on going projects in South Africa.

As quoted from the press release:

Highlights

  • 28 percent higher attributable EBITDA than per previous half year guidance
  • Attributable EBITDA of AU$48.5 million expected for FY2018.
  • Group EBITDA expected for FY2018 is AU$70 million – a 27 percent increase on the previous guidance AU$55 million
  • Guidance is based on actual results year-to-date and internal assumptions for the international coal price, foreign exchange forecasts, prevailing contract prices and estimated costs for the June 2018 month.
  • Record production of 4.7Mt (2.9Mt attributable), up 2 percent from guidance
  • Kangala Colliery is expected to delivered more than 2.5Mt of product to Eskom for FY2018.
  • New Clydesdale Colliery exceeds the committed tonnes for FY2018 by 14 percent and benefits by significant increase in API4 export price since July 2017.

On January 17, 2018, Universal provided forward looking earnings guidance for FY2018 that updated the forecast EBITDA for FY 2018 to AU$55 million (Attributable: AU$37.9) and projected steady state production of 4.6Mt (attributable of 2.8Mt). The company is pleased to increase the expected EBITDA for the group by 27 percent to AU$70 million (Attributable: AU$48.5 million) and saleable tonnes of 4.7Mt (Attributable:2.9Mt).

The very strong increase in EBITDA for FY 2018 is due to:

1) Strong production performance by the Kangala operation which exceeded the projected sales tonnes by approximately 150Kt for FY2018.

2) The new Clydesdale Colliery (NCC) achieving 14 percent more than projected sales tonnes for FY2018. The NCC received approximately AU$27 of revenue per export tonne more than in the projected forecast for the period January 2018 to June 2018. The increase in revenue contributed an additional AU$12.2 million of revenue to the financial results for the last six months of the FY2018.

3) The company forecasts an overall total sales tonnage of 4.7Mt (attributable 2.9Mt) of product sold to market for the FY2018.

4) Operational costs remain in line with forecasts.

5) The original EBITDA was enhanced by a AU$2.6million FX gain for FY2018 due to the increase in ZAR:AUD exchange rate over the period January to June 2018.

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