New Hope Helps Soul Patts Double Profit
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Brickwork’s associate, Soul Pattinson has more than doubled full-year profit to an all time high thanks to strong performances from its investments in coal miner New Hope Corporation, Brickworks and telco TPG Telecom.
Statutory profit for the diversified investments house more than doubled to $333.6 million, up from $149.4 million a year ago, with the rebound in world coal prices lifting the profit contribution from its 59.6% owned subsidiary, New Hope up to $83.8 million for the 216-17 year, up from a $29.2 million loss the year before.
Soul Pattinson’s underlying net profit for the year to July 31 - which measures profit from continuing operations - jumped 59.1% to $282 million, the highest ever for the group.
Soul Pattinson said New Hope delivered the strongest growth, benefiting from a recovery in coal prices and its acquisition of a 40% interest in the Bengalla coal mine in NSW in 2016 which contributed for all of the latest financial year.
Chairman Robert Millner said he was pleased with the group’s strong earnings growth but cited regulatory uncertainty, soaring electricity prices (especially at Brickworks) and the margin-crunching impact of the National Broadband Network on TPG’s results as major headwinds for the year ahead. Soul Patts owns around 27% of TPG.
TPG this week slashed its final dividend to 2 cents a share from 7.5 cents and warned of a lower profit for 2017-18 as it starts spending heavily on its planned new mobile networks in Singapore and Australia.
"Unfortunately, many Australian companies are forced to contend with a difficult regulatory environment which is making our businesses globally uncompetitive," Mr Millner said in a statement on Thursday.
"Despite these challenges, we are delighted with the strong earnings growth exhibited across the portfolio."
TPG added more than $104 million to Soul Pattinson’s results, up from $97.5 million a year ago.
Soul’s stake in brick maker Brickworks contributed $36.3 million, up 6.1.
A final fully franked dividend of 32 cents, up from 31 cents will be paid. That made a full eyar payout to shareholders of 54 cents a share, ip 2 cents.
Soul Patts shares were down 3.4% at $16.27.
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.