There will be some very happy shareholders in New Hope Corporation – especially its major holder – Washington H Soul Pattinson after the NSW and Queensland coal miner lifted total dividend payout for 2017-18 by 40%.
New Hope directors declared a final dividend of 8.0 cents a share. This dividend fully franked and will take the total payout for the year, to 14.0 cents a share (6 cents a share interim) compared with 2017 total of 10 cents a share.
With 50% of New Hope, Soul Patts, which reports its 2017-18 figures tomorrow, will pick up a nice lift in cash inflow later this year from the higher dividend when it is paid in November.
As updated last Friday, New Hope saw a sharp improvement in underlying earnings in the year to July 31.
The company said its full-year pretax profit after one-off items climbed 6% to $149.5 million from $140.6 in 2016-17, as markets for thermal coal priced in Australian dollars maintained near six-year highs record because of pollution-linked output curbs in major supplier China.
Prices in fact sagged earlier this year after surging after the impact of Cyclone Debbie in March and April 2017 sent global prices surging as coal supplies from Queensland were curtailed for months. Prices dipped in early 2018 but started rebounding from April because of the crackdown in China on local mining while the record European heat wave also boosted prices back above $US100 a tonne.
They are now around $US120 a tonne which is close to six-year highs.
New Hope directors reckon prices will remain high for the coming year which will boost revenue with output and sales expected to be maintained around the 2017-18 level of 9 million and 8.9 million tonnes respectively.
New Hope reported a net profit after tax and before non-regular items of $252.6 million for the year ended July 2018. The result comprises a profit of $252.8 million from coal mining, marketing, and logistics operations and a loss of $0.2 million from oil operations. The result is 96% higher than the 2017 result of $128.7 million.
After non-regular items (mostly an impairment of the value of mining areas) the Company reported a net profit after tax of $149.5 million for the year ended July 2018. That result was 7% higher than the 2017 result of $140.6 million.
New Hope said its two operating mines in South East Queensland (New Acland and Jeebropilly) combined to produce 5.2 million tonnes of saleable coal during the year ended 31 July 2018.
And in NSW, the Bengalla mine in the Upper Hunter Valley (New Hope’s 40% interest) produced 3.8 million tonnes for the year. All up the group produced 9.0 million tonnes of saleable coal in 2018 which is an increase of 5% on 2017 coal production.
Total coal sales in 2018 were 8.9 million tonnes which was up on the 8.5 million tonnes sold in 2017.
On August 7 New Hope announced it had reached a binding commitment with Wesfarmers Limited to acquire their 40% interest in the Bengalla Mine (subject to the pre-emptive rights of the other Joint Venture parties) for $860 million.
“This acquisition demonstrates New Hope’s long-term commitment to the Bengalla Mine and a positive outlook for the global export thermal coal market. This acquisition is expected to settle early in the 2019 calendar year,” directors said.
Oil production for Bridgeport Energy was 373,875 barrels in 2018, a 21% increase on 2017. This significant increase in production was the result of the full year impacts of the Greater Kenmore Bodalla assets, improved production performance at the principal assets which was achieved without any lost time injuries.
Revenue for the year was $29.1 million against $18.7 million for the prior year, an improvement of 56%. Realised oil sales prices averaged $88/bbl against the previous year of $65/bbl. EBITDA was $8.0 million.
Bridgeport now manages over 140 wells across its ten operated production assets and is one of the most active operators in the Cooper Basin producing approximately 1,100 bopd.
Looking to the coming year directors said that “all coal operations are expected to produce at similar levels to the 2018 financial year. Continuing global demand for high quality Australian thermal coal is likely and with limited scope for increased supply, should see prices remain firm, which will continue to underpin strong results from this business segment.
“It is expected that coal reserves will be exhausted at Jeebropilly Mine late in the 2019 calendar year. The focus will then transition to optimising the post-mining land use. Jeebropilly is ideally located in close proximity to the city of Ipswich which provides attractive sale or development opportunities for industrial, commercial and residential use.”
New Hope shares eased 0.3% to $3.67.
