A near halving in earnings for New Hope Group
(ASX:NHC) has led the coal exporter to slash its final and full-year dividends, reflecting a slump in global prices for thermal coal.
The result was on par with similar outcomes from Yancoal Australia (for its June half), Whitehaven (full year), and smaller players.
It was the end of La Niña that saved New Hope from a very weak result, with coal production surging by more than a quarter over the year to July.
While the slide in global prices over the past two years continues to significantly impact miners and exporters like New Hope, the end of La Niña, which had caused heavy rain, flooding, and transport delays, had a positive effect on the export coal industry in New South Wales and across southern and central Queensland.
However, not all was smooth for New Hope, as the final quarter saw disruptions at the Bengalla mine, many caused by climate protesters.
Logistical constraints during the July quarter resulted in a large number of rail cancellations, caused by protester disruptions, track issues, labour shortages, and adverse weather. These factors impacted deliveries by rail customers across the Hunter Valley region to the Port of Newcastle.
On Tuesday, the company informed the ASX that revenue fell by 34.6% to $1.8 billion, down from just over $2.7 billion in 2022-23, leading to a 56% slump in earnings after tax to $475.8 million – still a considerable profit.
This came after a 56% drop in underlying EBITDA to $859.9 million, down from 2022’s $1.746.6 billion. New Hope noted this was the third-highest result in the company’s history.
The annual dividend was slashed to 39 cents per share, down from 70 cents, with a lower final dividend of 22 cents per share, compared to 30 cents a year ago.
The company's results confirm the broader data from the July quarter and full-year report released in August.
The average price for the company’s coal in the July quarter was $US137.28 per tonne, down 3.6% from the July 2023 quarter.
New Hope reported it produced 9.1 million tonnes of saleable coal, up 26.4% from the La Niña-impacted 2022-23 figure of 7.2 million tonnes, as production from the company’s Bengalla mine in the upper Hunter Valley rebounded and operations at its New Acland mine in southern Queensland resumed.
New Hope CEO Rob Bishop stated in Tuesday’s release that the company had "delivered on our organic growth pipeline, with the realisation of productivity benefits from the Bengalla Mine Growth Project and the restart of operations at New Acland Mine resulting in a significant increase in coal production."
He added, "The combination of a robust thermal coal price environment, disciplined cost control, and strong operational performance contributed to the third-highest earnings result in the history of our company."
"Looking ahead, we remain focused on the organic growth of our business via the ramp-up of New Acland Mine, sustained increased production at Bengalla, and the development of Malabar’s Maxwell Underground Mine, all of which are low-unit cost assets."
New Hope increased its stake in Malabar from 15% to just under 20% by the end of July.