The New Hope Corporation Ltd (ASX: NHC) share price jumped more than 2% after reporting its FY24 result.
New Hope is one of the largest coal miners in Australia, with three assets – Bengalla, New Acland and Malabar.
FY24 result
New Hope reported how it performed in the 12 months to July 2024. Here are some of the highlights:
- Coal sold increased 14% to 8.7mt
- Underlying EBITDA dropped 51% to $860 million
- Underlying profit margin down 62% to $89 per tonne
- Net profit after tax (NPAT) sank 56% to $476 million
- Cashflow from operations declined 63% to $562 million
- Final dividend of $0.22 per share
- Annual ordinary dividend per share of $0.38, down 38%
- Annual special dividend per share of $0.09, down 74%
New Hope said the amount of saleable coal produced increased by 26.4% to 9.1mt, supported by what the company called a “strong operational performance at Bengalla Mine and the successful restart of operations at New Acland Mine”.
The Bengalla Mine’s key metrics related to its growth project were achieved during the year, with both the targeted 13.4mt per year run-of-mine (ROM) run rate and the washery input metric being achieved ahead of schedule.
At New Acland, the first coal was mined, railed and sold after the restart of operations, marking a “significant milestone” for the company.
New Hope also noted during the year it increased its stake of Malabar Resources from 15% to 19.97%. This business provides exposure to “high-quality metallurgical coal” and aligns with the company’s strategy of investing in low-cost coal assets with long-life approvals.
It also pointed to the acquisition of the West Muswellbrook tenement and the start of exploration drilling at EL9431, both located to the west of the Bengalla Mine which can “provide longer-term growth optionality as the Bengalla open-cut put progresses in that direction.”
Management commentary
New Hope CEO Rob Bishop said:
This year, we’ve 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.
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.
As a result, we are pleased to reward shareholders with a fully franked final dividend of 22.0 cents per ordinary share.
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.
This growth pipeline offers significant targeted production increases, which will ultimately create additional value to return to our shareholders.
Final thoughts on the New Hope share price
The New Hope dividend continues to be appealing, but it’s hard to say if it’s a good buy today because the main factor of its medium-term success – the coal price – is impossible to predict. It’s not the most appealing stock, partly because of the likely reducing demand for coal in the long-term. But, if energy demand jumped, it would probably benefit.
There are plenty of other ASX dividend shares I’d rather buy instead.
