Australia's Whitehaven Coal slides into the red

MELBOURNE Mon Feb 25, 2013 6:58pm EST

MELBOURNE Feb 26 (Reuters) - Australia's Whitehaven Coal reported a first-half loss on Tuesday, whacked by weak coal prices and a strong Australian dollar, but said it is on track to start construction of its key growth project in mid-2013.

Whitehaven, 19 percent owned by struggling tycoon Nathan Tinkler, warned in January that operating earnings this year would drop to less than A$20 million if thermal coal prices stayed around $95 a tonne, their current price.

Operations at its Narrabri mine were hit by a rail outage in December and increased moisture in its coal. Whitehaven said on Tuesday it expects the moisture problem to ease in the June quarter this year.

It reported a net loss of A$47 million ($48.3 million) for the six months to December 2012, down from a profit of A$19.9 million a year earlier.

Analysts on average expect full year earnings before interest, tax, depreciation and amortisation (EBITDA) of A$52 million, and a net loss of A$4 million, according to Thomson Reuters I/B/E/S.

Whitehaven's shares fell 1.7 percent on Tuesday to A$2.95 in a broader market that was down 1.2 percent, trading near a three-month low.

Most of Tinkler's wealth is tied up in his Whitehaven stake, worth about A$1.1 billion at its peak and now just A$580 million, with creditors circling his stable of mining, sports and horse racing businesses.

Whitehaven appointed Paul Flynn, a former Tinkler ally, as its new managing director last week to replace Tony Haggarty, who flagged last year that he would step down following the takeover of Tinkler's Aston Resources.

Tinkler declined to comment on Flynn's appointment and was not available on Tuesday to comment on Whitehaven's results, his spokesman said.

Whitehaven said it expects to start construction of its 10.8 million tonnes a year Maules Creek mine in mid-2013, aiming for first coal sales in the second half of the 2014 calendar year.

"Despite the current weakness in coal markets, Whitehaven intends to bring the mine into operation as soon as possible," it said in its results announcement.

Whitehaven has two Japanese partners in Maules Creek. Trading house Itochu Corp owns 15 percent and Electric Power Development Co (J-Power) owns 10 percent of the project. ($1 = 0.9728 Australian dollars) (Reporting by Sonali Paul; Editing by Richard Pullin)

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