Coronado posts 685% climb in profit

After posting a $137.38m loss during the last full year reporting season, Coronado Global (ASX:CRN) shareholders are seeing huge profits posted on the back of a surge in coal markets driven by a conflation of macro factors.

Much of the result can be attributed to energy embargoes after the Kremlin invaded Ukraine, which ultimately led to a surge in global coal markets.

"The continued impact of the Russian invasion of Ukraine on global supply dynamics caused considerable volatility in coal pricing," the company said.

Also worth noting is that Coronado intends to sell coking coal to Europe as that situation continues to unfold.

Let’s take a look at the main numbers: 

• Revenue: $2.83bn (up 147.4%) 

• Net income: $803m (up 685%) 

• Average realised price/tonne: $418.88 (up 193.4%) 

• Sales volume: 8.3MMt ( down -7%) 

• Operating cost/tonne: $192.42 (up 56.8%) 

Even despite lower sales volumes and higher operating costs - higher due to inflation, geopolitics, and wet weather - Coronado is still blowing last year’s performance out of the water on the back of higher coal prices at $418.88/tonne. 

Shareholders will see a dividend of 10.75cps (unchanged) paid out on 20 September.

It’s worth noting the company expects to start paying franked dividends by early 2023.

Uncertain outlook ahead, but prices to stay high 

For the rest of 2022, Coronado expects metallurgical coal prices to remain above average, even in a depressed global demand environment, given the impetus on sourcing coal from places that aren’t Russia. 

Coronado’s largest export endpoint, India, is expected to see a downgraded GDP growth rate next year, which Coronado expects to act as downward pressure.

However, it also notes global coal demand is set to continue rising into the 2050s. 

Coronado's one year charts compared to the materials index.