Wesfarmers look at way out of coal
Wesfarmers says it may back out of its loss-making coal business.
The company's coal mining operations posted an operating loss of $310 million in its full-year results, a big drop from the $50 million profit it made in 2015.
Wesfarmers posted a full-year net profit of $407 million in August, down 83 per cent on the previous year.
It was battered by a $2.1 billion write-down in the value of its Curragh coal mine in central Queensland.
The revenue drop has also been linked to diminished sales volumes and prices from metallurgical and steaming coal.
“Wesfarmers has previously disclosed that it is evaluating all strategic options for its resources business,” the company said in a statement released to the ASX.
“Wesfarmers is continuing to consider a broad range of options, from operational to divestment initiatives, including recently seeking expressions of interest from external parties who may want to acquire the coal assets.
“There is no certainty this process will lead to a transaction and Wesfarmers will update the market further if and when appropriate.”
Coal prices have popped back up in the past few months, with demand across Asia remaining strong.
Analysts say getting out of coal during the current peak in the market would be a significant benefit to Wesfarmers.