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New Hope Corporation Ltd (ASX:NHC), one of Australia’s leading coal miners, experienced a notable share price increase of over 2% following the release of its financial results for the fiscal year ending July 2024
FY24 Financial Highlights
For the 12 months to July 2024, New Hope Corporation reported several key figures:
- Coal Sales: Increased by 14% to 8.7 million tonnes (mt).
- Underlying EBITDA: Decreased by 51% to $860 million.
- Underlying Profit Margin: Down 62% to $89 per tonne.
- Net Profit After Tax (NPAT): Fell 56% to $476 million.
- Cash Flow from Operations: Declined 63% to $562 million.
- Final Dividend: Set at $0.22 per share.
- Annual Ordinary Dividend: Decreased by 38% to $0.38 per share.
- Annual Special Dividend: Reduced by 74% to $0.09 per share.
Despite the decline in several financial metrics, New Hope noted significant achievements. The company’s saleable coal production rose by 26.4% to 9.1 mt, driven by strong performance at the Bengalla Mine and the successful restart of the New Acland Mine.
The Bengalla Mine met its growth project targets, including achieving a run-of-mine (ROM) run rate of 13.4 mt per year ahead of scheduleNew Acland’s restart marked a milestone with its first coal mined, railed, and sold.
New Hope also expanded its stake in Malabar Resources from 15% to 19.97%Malabar provides exposure to high-quality metallurgical coal and aligns with New Hope’s strategy to invest in low-cost, long-life coal assetsAdditionally, the acquisition of the West Muswellbrook tenement and the commencement of exploration drilling at EL9431 are expected to offer long-term growth potential.
Management Commentary
CEO Rob Bishop highlighted the company's achievements:
“This year, we’ve delivered on our organic growth pipeline, with the realization of productivity benefits from the Bengalla Mine growth project and the restart of operations at New Acland Mine leading to a significant increase in coal production.
The combination of a robust thermal coal price environment, disciplined cost control, and strong operational performance resulted in the third highest earnings result in the history of our companyWe are pleased to reward shareholders with a fully franked final dividend of 22.0 cents per ordinary share.”
Looking ahead, New Hope remains focused on the organic growth of its business through the ramp-up of New Acland Mine, continued production increases at Bengalla, and the development of Malabar’s Maxwell Underground MineThese initiatives are expected to drive targeted production increases and create additional value for shareholders.
Final Thoughts
The dividend offered by New Hope Corporation continues to attract interest, but the coal price remains a critical factor for the company's medium-term successPredicting coal price trends is challenging, and long-term demand for coal may decreaseHowever, a surge in energy demand could benefit coal producers like New Hope.
As energy markets and commodity demands evolve, New Hope’s performance and dividend yield make it a stock worth monitoring, especially given its recent financial results and strategic investments.
