NEW Hope Corporation Limited (NHC) has recorded a 29.9 per cent fall in net profit after tax (NPAT) for FY10, despite record coal export sales of 4.9 million tonnes.
Managing director Robert Neale (pictured), says the company has increased productivity but lower coal prices and a high Australian dollar have led to the fall in operating profit to $112.6 million.
“It’s the biggest sales we’ve ever had on the one hand, volumes are up and we’re very pleased getting the coal to market, but prices have fallen from around $122 to around $90,” he told brisbanebusinessnews.com.au.
“So you’re losing $30 a tonne relative to the previous year and our transport costs have increased as well. If exchange rates continue to climb heading towards parity range, all Australian exporters will suffer some pain to some extent, but if it comes off we’ll gain.”
New Hope recently benefitted from the sale of Arrow Energy to Shell, to the tune of $326 million, but this result will be part of NPAT for FY11.
“Obviously we’ve been looking at opportunities in the coal game for a while and certainly with the money from Arrow it will give us strike power to make acquisitions, but at this stage we haven’t found anything,” says Neale.
With expectations to produce six million tonnes of coal this year, compared to 5.9 million tonnes in FY10, chairman Robert Millner also points to promising exploration prospects.
“Our exploration targets certainly received a significant encouragement from Lenton in central Queensland in the Bowen Basin and we’ll continue to assess the opportunities there, with seismic work and drilling work set to take place over the next few years,” he says.
“Planning is also underway to take advantage of a new mining lease at our largest coal producing operation, the New Acland Mine, which if granted in 2011 could enable production capacity to be incrementally increased up to 10 million tonnes per annum, subject to market conditions, rail and port capacity.”
New Hope shares fell 2.1 per cent this morning to $5.06.