Wollongong Coal had a massive half-year loss blowout – and it’s blaming the AUD
Struggling coal tiddler Wollongong Coal’s half year loss has blown out by 143 per cent, and it says the problem is the weak Aussie dollar.
The half-year loss hit $57.6m.
This was because of a net foreign exchange loss of $33.5m, versus a gain of $9.8m in the same six months the year before.
Wollongong (ASX:WLC) said the foreign exchange loss was due to the change in exchange rate between the US dollar and Australian dollar on its US dollar borrowings.
The coal market, however, is picking up and the company witnessed a 70 per cent uptick in its revenue, banking $34.4m in the six-month period.
Wollongong, which produces metallurgical coal, put the increased revenue down to higher production and better coal prices.
Metallurgical coal is a low-ash, low-sulphur and low-phosphorus coal that can be used to produce high-grade coking coal — an essential part of the steelmaking process.
The coking coal price has leapt nearly 42 per cent since the start of the current financial year, reaching its highest point since March — when it punched through the $US200-per-tonne mark.
The International Energy Agency released its World Energy Outlook last week and it shows a growing international metallurgical coal market, especially in Asia.