Coal company New Hope Corporation Ltd (which is part of the Soul Pattinson group of Sydney) has suffered a sharp fall in operating earnings, despite achieving record levels of production and exports for the year to July 31.
New Hope yesterday reported an annual net profit of $183.8 million for the 12 months to July 31, down from $1.95 billion profit in the prior year which was boosted by a capital profit of $1.7 billion for selling the Saraji coking coal prospect back to BHP-Mitsubishi.
The company said the profit figure included $112.6 million operating profit and $71.2 million earned from investments.
It was down 29.9% from the previous year’s $262.3 million when $150.5 million was earned from operations and $111.8 million from investments.
Revenue from ordinary activities rose 6.3% to $744.98.
Saleable coal production jumped 15.2% to 5.9 million tonnes while export sales rose 26.2 % (excluding traded coal sales) to 4.9 million tonnes.
Chairman Robert Millner said in the statement that the 2010 full year earnings had been impacted by a mix of lower export coal prices, higher dollar exchange rates, higher transportation costs and reduced interest earnings following the payment of a special dividend and tax on the New Saraji sale.
"New Hope’s expansion plans remain on schedule and within budget with the company targeting a modest increase in coal production for 2011 of six million tonnes, subject to available rail capacity," Mr Millner said.
The fiscal 2011 result would include a profit after tax of $326 million from the sale of Arrow Energy, he said.
New Hope will pay a final dividend of 4.5c per share, and a special dividend of 14c per share, bringing the total dividend to 23.5 c.
New Hope says it expects coal production of six million tonnes in fiscal 2011.
Mr Millner said, “Planning is also underway to take advantage of a new mining lease at our largest coal producing operation, the New Acland Mine, which if granted in 2011 could enable production capacity to be incrementally increased up to 10 million tonnes per annum, subject to market conditions, rail and port capacity".
The shares eased 17c to $5, a fall of 3.4%.
Other companies in the group, Washington H Soul Pattinson and Brickworks, are due to report results tomorrow.
Shares in Premier Investments rose yesterday, not because its retailing interests (predominantly Just Group) produced a stunning set of figures, but because the company doled out another special dividend to shareholders from its huge cash pile.
The shares rose 10c to $6.98 (up 1.4%), thanks to a final dividend of 28c per share, including a special dividend of 10c per share.
The market had been looking for a 20c a share special payment after one was made with the interim dividend (38c in total), but shrugged off that disappointment to send the shares higher in a market that drifted most of the day.
The final dividend made a total of 66c for the year, including 30c a share in special payments.
That’s 10c a share lighter than the 76c a share paid out in two 38c share payments (including two 20c a share special payments) in 2009.
While it blamed rising interest rate rises among the factors impacting sales at Just Group in the 2010 year, it wasn’t the entire story.
Premier’s management is still struggling with some of the minor chains such as Portmans where losses totalled more than $18 million in the latest year.
That was an important factor behind the reported 3.8% fall in net profit to $79.63 million for the July 31 year.
The result was in line with recent guidance, which was downgraded due to the challenging retail environment (which now, according to most recent retail sales figures, has been shown to have been no so challenging in June and July).
"As previously announced, retail trading in the second half was abnormally volatile," Premier said, referring to Just Group.
"Successive interest rate rises had a clear adverse impact on consumer confidence and discretionary spending.
"The second half was also impacted by the cycling of the Australian government economic stimulus and sustained abnormal weather conditions in each of Just Group’s major markets," it said.
It said there had been intensive discounting industry-wide.
And, the company said the result was pushed lower as well by an overall loss of $18.5 million from its Portmans division, which it bought at the end of 2008.
The company said a change of financial year from fiscal 2009 also meant there were fewer weeks in fiscal 2010 compared to the previous 12 months.
Despite the poor performance at Portmans, Premier remains a believer and says the transformation of the brand will bring future benefits.
It forecast full year earnings before interest, tax and amortisation (EBITA) in 2010/11 in the range of $100 million to $110 million.
That compares to just over $84 million in the latest financial year.
Premier chairman Solomon Lew said the Just Group’s diverse portfolio and strong brands had positioned the company well for a rec
