New Hope Coal (NHC), as associate of the Washing Soul Pattinson-Brickworks group of companies, says it is still interested in coal assets, even though it has been a dud performer in recent years as an investment.
New Hope’s Queensland coal mines are marginal businesses, depending more on cost efficiencies than on any solidity in the market price for its mostly thermal coal output and exports.
The company reported a $21 million loss for the year to July, thanks mostly to around $73 million of impairments on oil, gas and coal.
The group is majority owned by Washington H. Soul Pattinson/Brickworks, which are in turn dominated by the Milner family of Sydney.
New Hope’s continuing cost-cutting programs once again helped offset the weakness in coal prices, improving underlying profit for the financial year by 25% to $51.7 million, compared with $41.5 million in the 2013-14 year.
But it posted a net loss of $21.8 million, swinging from a $58.4 million net profit the previous year, after taking $73.6 million in impairments, mostly in oil.
Revenue fell to $508 million in the year from $459 million in 2013-14.
Despite the loss, New Hope will pay a fully franked final dividend of 2.5 cents a share, and a special dividend of 3.5 cents, bringing the total dividend payout for the fiscal year to 10 cents a share, down from the 11.5 cents paid the year before.
NHC 1Y – New Hope looking to "take advantage of prevailing market conditions"
New Hope chief executive Shane Stephan said the miner was looking to "take advantage of prevailing market conditions" by using its $1.06 billion cash pile to buy coal.
"We are actively reviewing asset acquisition opportunities," he said.
"We are interested in projects where we can draw on our existing operational expertise and add additional coal production capacity."
New Hope is understood to be interested in the coal assets of Rio Tinto which are mostly based in and around the Hunter Valley area of NSW.
Thermal coal (used in power stations and cement making) is trading around $US56 a tonne, nowhere near the $US150 it was fetching during the boom days of 2011.
New Hope’s coal sales of 5.8 million tonnes were 200,000 tonnes (more than $11 million in revenue) down on the previous year, and with no prospect of a significant upturn in demand in the coming year, cost cutting will remain a key focus for management.
The shares jumped 9% to $1.755 at one stage before easing to close up 5.6% at $1.70.
