Yancoal Australia shares fall 13% after FY net income drop

Yancoal Australia shares fall 13% after FY net income drop

Yancoal Australia Shares Fall 13% After FY Net Income Drop

Yancoal Australia Ltd (ASX: YAL) shares plummeted 13% on Thursday, falling to $5.27 per share, as the stock went ex-dividend and broader coal market pressures weighed on investor sentiment. The decline follows a 14% increase in attributable coal sales during fiscal year 2024 (FY24) but a 24% drop in realised coal prices, which contributed to a full-year revenue decline to $6.86 billion from $7.78 billion in 2023.

Weak global coal prices have been a key driver of the sell-off. Newcastle coal futures hit a four-year low of $99 per tonne in late February 2025 and remain near $101.50, down 19% year-to-date and 22.5% over the past 12 months. Analysts attribute the downward pressure to oversupply concerns, with China and Indonesia increasing production to record levels in 2024. Despite temporary relief from reduced output at some global mines, long-term oversupply risks persist.

Yancoal's financial resilience has been highlighted amid the downturn. The company maintained a 37% operating EBITDA margin in FY24 and announced a fully franked final dividend of 52 cents per share, payable on April 30. However, its return on equity (ROE) of 11%—aligned with the industry average—suggests limited profitability differentiation, despite a 26% five-year net income growth rate. The firm's 50% payout ratio over three years indicates a balance between shareholder returns and reinvestment, though analysts note this may constrain future growth potential.

The stock's 18% decline year-to-date reflects broader market skepticism, compounded by forecasts of shrinking future earnings. While Yancoal's dividend yield of 9.87% offers some appeal, investors remain cautious amid volatile commodity prices and global supply dynamics.

This article is for informational purposes only and does not constitute financial advice.