Whitehaven Coal has revealed a huge drop in first-half earnings, although the period was marked by lower coal prices and the purchase of two Queensland mines.

The exporter, which sends much of its coal to Asia, on Thursday posted an 86 per cent decline in net profit for the six months to December 31 to $257.6 million.

Excluding $114.7 million in acquisition costs, Whitehaven’s underlying net profit fell 79 per cent to $372.3 million.

Chief executive Paul Flynn said thermal coal prices had moderated in the half but remained resilient.

The miner had a realised average price of $A220 per tonne.

Looking ahead, Mr Flynn had a positive outlook.

He said demand for thermal coal was strong, including for electricity generation in established and emerging Asian markets.

Mr Flynn said there was a shortfall in supply in the seaborne market for thermal coal. 

This would continue, he said, due to underinvestment in new supply and the depletion of existing mines, which in turn would support strong long term prices for thermal coal.

The metallurgical coal market was also strong, the Whitehaven boss said.

A growing shortfall in hard coking coal production to supply Asia would help prices over the long term.

Mr Flynn said he expected the purchase of the Daunia and Blackwater mines in central Queensland to be completed in early April. 

Whitehaven in October said it will pay up to $6.4  billion for the mines from a BHP-Mitsubishi joint venture. 

Shareholders will receive a fully-franked interim dividend of seven cents per share. 

This is lower than the fully-franked payout of 32 cents per share this time last year.

This post was originally published on Michael West.