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- New Hope Corporation (NHC) sees strong half-year results due to the surge in realised coal prices and cost saving measures
- The coal miner’s reported a net profit of $330.4 million for the period, compared to a $55.4 million loss in the prior corresponding period
- The New Hope board declared a fully franked interim dividend of 17 cents per share and a special dividend of 13 cents per share
- CEO Rob Bishop said demand for high-quality, lower emissions thermal coal is expected to remain robust in the short to medium term
- NHC shares up 7.34 per cent to $3.15
New Hope Corporation (NHC) has reported strong half-year results for the six months ended January 31, 2022, due to a surge in realised coal prices.
The now debt-free coal producer posted an impressive net profit of $330.4 million for the period, compared to a $55.4 million net loss in the previous corresponding period (pcp).
Underlying earnings before interest, taxes, depreciation and amortisation topped the half a billion-dollar mark at $554.4 million for the latest half year, up from $81.2 million in the pcp.
The New Hope board declared a fully franked interim dividend of 17 cents per share for the latest half year, up from four cents in the pcp, and also announced a special dividend of 13 cents per share, both payable on May 4, 2022.
Coal prices the company received on its sales more than doubled for the half year, averaging $192.38 per tonne for the half year, representing a 147 per cent increase on the pcp.
The closing realised price for the reporting period was $236.66 per tonne.
Contributing to the “exceptional” financial performance were cost controls across the group, New Hope said.
CEO Rob Bishop said demand for high-quality, lower emissions thermal coal was “expected to remain robust in the short to medium term as supply remains constrained”.
“Cost control disciplines that were introduced during the 2021 financial year in response to a period of depressed prices have been embedded across the group and will ensure that New Hope remains in the lowest cost quartile compared to other producers of seaborne thermal coal,” he said.
“Strong demand and lower than normal stock levels held by customers have pushed thermal coal prices well above the long-term average. Newcastle Index pricing is currently above US$300 per tonne, and our forward sales book will support robust returns.
“The company is experiencing significant cash build following the remarkable recovery in coal prices since the lows of FY20. With the near-term coal price outlook remaining strong, coupled with a generous franking account balance, the company is rewarding shareholders with larger fully franked dividends for this reporting period.”
New Hopes ended the latest reported half-year period in a strong capital position with cash and cash equivalents of $513.1 million and availability of $420 million under an undrawn syndicated debt facility.
NHC shares were trading 7.34 per cent higher at $3.15 at 2:50 pm AEDT.
