New Hope Swings Back To Profit
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Coal miner New Hope Corporation, which is a part of the Washington H. Soul Pattinson group of companies has swung to an annual profit on the back of stronger sales and sharply improved coal prices - much from its from its recently purchased stake in the huge Bengalla mine in the Upper Hunter Valley of NSW.
New Hope yesterday reported (http://www.newhopegroup.com.au/content/investors/asx-announcements) a net profit of $140.6 million for the year through July, rebounding from a year-earlier loss of $53.7 million. Revenue for the year jumped 59% to $844.0 million from $531.5 million, thanks to the Bengalla buy.
The miner said it planned to pay a final dividend of 6 cents a share, a jump on the 2 cents paid last year, for a full-year payout of 10 cents a share, up from 4 cents previously.
In late August, New Hope reported an 18% rise in raw coal production for the year to 14.7 million tonnes and a 23% jump in total coal sold to 8.5 million tonnes as it benefited from the acquisition in 2016 of a 40% stake in the Bengalla joint venture in New South Wales.
It also lifted oil sales over the year by 61% on the back of acquisitions in the last two years.
New Hope paid $US616.7 million deal for Rio Tinto’s interest in the Bengalla thermal coal mine.
Last month, New Hope’s majority-owned Lenton joint venture said it was buying Peabody Energy Corp’s Burton coal mine and infrastructure near its own New Lenton project for $14 million.
New Hope expects production at Bengalla to continue to improve in 2017-18.
Newcastle benchmark spot thermal coal prices recently exceeded US$100 per tonne but New Hope believes this level of pricing is not likely to be sustained.
"Actions taken by the Chinese government in managing domestic coal supply is having a positive impact upon Chinese domestic thermal coal prices. These prices are influential throughout Asia. Demand for high quality Australian thermal coal into Asian markets continues to grow," New Hope said.
"As ownership of the thermal coal industry in Australia continues to be rationalised, end users are becoming concerned about concentration of supply. New Hope, as an independent Australian controlled coal producer, has a growth strategy aligned to service the growing needs of electricity producers in the growth markets of Asia," it added.
New Hope shares jumped nearly 4% to end at $1.85.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.