Queensland coal producer New Hope Corporation has reported a 15.8% fall in interim net earnings before one off items after lower prices and a stronger Australian dollar bit into export returns.
The company told the ASX yesterday that including one offs, earnings fell 93.9% to $111.58 million.
But the reported profit in the prior corresponding period had included a $1.69 billion gain on the sale of the New Saraji coal assets to BHP and Mitsubishi.
And shareholders will have another big capital profit to rejoice over as New Hope is Arrow’s largest shareholder and stands to get over half a billion in cash and shares from the Shell/PetroChina bid, if its successful.
The company said yesterday that the result had been affected by lower US-dollar sale prices for coal and a higher Australian/US dollar exchange rate.
"Despite increased export sales the result was impacted by lower US dollar sale prices for coal, and a higher Australian/US dollar exchange rate.
"New Hope also had reduced interest income due to a higher tax expense and increased dividends paid during the period from the proceeds of the $2.45 billion sale of the New Saraji Project to the BHP Billiton Mitsubishi Alliance (BMA) in 2008," the company said.
The result was slightly ahead of the company’s earlier guidance of $100 million to $110 million.
Earnings per share were 13.5c.
Directors have declared an interim dividend of 5c a share, up slightly from 4.75c for the interim period of 2009.
Chairman Robert Millner said in the statement to the ASX that New Hope continued to expand production efficiency, with total coal sold being 24.3% higher than the previous corresponding period at 2.8 million tonnes.
“We’ve got an exceptionally strong balance sheet and we are well-positioned to take advantage of future opportunities,” he said.
Chief executive officer Rob Neale said, “Our revenue was up 19.4 per cent to $367.9 million due to growth in saleable coal production, which was up 15.2 per cent to 2.8 million tonnes.
“We also had higher export sales volumes, up 31.5 per cent to 2.2 million tonnes, but this was offset by the lower coal prices and higher exchange rates. “We are maintaining our full-year sales forecast of about 5.5 to 6 million tonnes, which is highly dependent on rail capacity.
“New Hope remains a low-cost producer and we will continue to increase our production and sales.
“Our current expansion projects, especially at New Acland and our Queensland Bulk Handling port facility, remain on schedule and on budget.”
And New Hope, says it will support a takeover offer from Royal Dutch Shell and PetroChina for Arrow Energy, worth more than $US3.5 billion.
New Hope is Arrow’s biggest shareholder, with 16.7% and the offer will see it get around $590 million in cash and shares in the new Arrow offshoot, Dart.
"In the absence of a superior proposal, New Hope supports the proposed transactions and intends to vote in favour of the demerger scheme and acquisition scheme for all the shares it owns or controls," New Hope said in its half-year results statement yesterday.
Shell and PetroChina raised their offer to $4.70 a share in cash for Arrow’s Australian assets plus one share in a new listed entity to be called Dart Energy, which will house the group’s Asian exploration assets and some Australian assets.
New Hope shares rose 2c to $4.90.
