The New Hope Corporation Ltd (ASX: NHC) share price is up 3% after the ASX coal share revealed a strong FY23 result.
New Hope Corporation share price
FY23 result
Here are some of the highlights for the 12 months to 31 July 2023:
- Realised price of A$346.7 per tonne, up 23%
- Total revenue of $2.75 billion, up 8%
- Underlying EBITDA (EBITDA explained) grew 11% to $1.75 billion
- Net profit after tax (NPAT) went up 10.6% to $1.09 billion
- Profit / earnings per share (EPS) of $1.26, up 6.7%
- Final ordinary dividend of $0.21 per share declared
- Final special dividend of $0.09 per share declared
- Full year dividend of $0.70 per share, down 19%
New Hope’s CEO said that “exceptional” performance across the business enabled it to capitalise on the market conditions, which saw strong demand and global supply constraints push thermal coal prices to record levels.
The ASX coal share finished the financial year with $730.7 million of cash at the bank and no debt.
New Hope noted that New Acland stage 3 operations commenced at the mine’s Manning Vale east pit in May 2023, and the coal handling and processing and plant washed its first coal earlier this month. This could be key for supporting the New Hope share price in the coming years.
The company owns 15% of Malabar Resources, which operates the Maxwell Mine, a 6.5mt per year underground metallurgical coal project in NSW. Maxwell processed its first coal, and its first train was unloaded at the Port of Newcastle during FY23.
Management commentary
The New Hope CEO Rob Bishop said:
We believe high-quality, low emission Australian thermal coal is critical to supporting the transition to a decarbonised economy. Our customers rely on our coal to produce secure, essential energy which supports their standards of living and economic development opportunities.
Final thoughts on the New Hope share price
New Hope said that there is a significant supply gap forecast for high quality coal, with a “chronic underinvestment” in thermal coal projects, which gives “significant earning potential for those with organic growth opportunities.”
New Hope said that production levels are close to doubling over the next three years through organic growth, namely from New Acland, and helped by Malabar.
Future growth is expected to be driven by developing countries, predominately South East Asia.
I’m not sure about ESG side of things when it comes to investing in ASX coal shares, but aside from that, New Hope could keep making sizeable profits and paying good dividends for a number of years. But, it’s not the sort of investment that I’d personally go for.
