Coal

Terracom wins 2023 coal offtake with energy heavyweight JERA

Fri 17 Jun 22, 10:21am (AEST)
A close up photo of coal fragments heaped together
Source: iStock

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Key Points

  • Terracom predicts its full earnings for FY22 will sit at $420m
  • The company today executed a long term offtake agreement with a Japanese company for thermal coal from Blair Athol
  • Terracom predicts coal sales across the next year to equal 2.2m tonnes

Coal producer Terracom (ASX:TER) is forecasting full FY22 earnings of $420m and a 10c dividend in September. 

The company is poised to continue momentum through the start of FY23 with a new long term offtake agreement minted today. 

Terracom will ship one cargo a month to Japanese energy heavyweight JERA for thirteen months into August 2023. 

Total shipment to JERA will be between 0.78 and 1.25m tonnes; each monthly cargo will include up to 88,000 tonnes.

The current shape of Newcastle Index coal futures
The current shape of Newcastle Index coal futures

Strong sales pipeline 

The company expects coal sales to total 2.2m by June 2023, fully sold until October 2022. 

A leftover 450,000 tonnes for the 8 months up to June next year will be sold on the spot market, depending on market conditions. 

As for the new JERA agreement, coal pricing will be linked to the globalCOAL Newcastle Index, the key regional benchmark for coal prices in Asia-Pacific. 

Terracom thriving on market chaos 

Since the start of 2022, Terracom’s share price has grown by over 300% to 73.5c.

A year ago, it was priced at 11c. 

High demand for energy supplies safe from hydrocarbon-based product volatility has defined energy markets since halfway through 2021, when energy inflation first began to properly take off. 

One year performance sits at 600% sharp. 

Terracom's 12 month performance compared to the ASX200 (XJO)
Terracom's 12 month performance compared to the ASX200 (XJO)

 

Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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