COAL PRICES HIT NEW HOPE PROFITS
Written on the 25 March 2014
ENERGY company New Hope Corporation Limited (ASX:NHC) has suffered a slump in profit, following challenging conditions in the coal market.
NHC reported net profit after tax in the first half of FY14 of $22.7 million, down from $68.8 million in the previous corresponding period.Despite revenue dropping from $322.9 million to $284.9 million, the company will drive for growth according to chief executive officer Shane Stephan (pictured).
“New Hope is managing the current downturn in global coal markets with a clear focus on cost management and operational efficiencies.“We have managed our total production costs by revising mine plans at New Acland and Jeebropilly and implementing productivity improvement initiatives at all of our sites,” he says.
Stephan says lower export coal prices, high exchange rate, increased offsite costs and closing the New Oakleigh mine impacted the results.Looking forward, he expects the tough conditions will continue to affect revenue and margins in the second half of the year.
“While conditions remain challenging for all Australian coal producers, New Hope is well-placed to withstand the downturn due to its comparative low cost of production, diversified asset portfolio and its strong balance sheet.“The company is in a strong financial position and has the ability to take advantage of potential acquisition opportunities,” he says.
NHC will pay a fully franked dividend of six cents per share on May 6.Shares were trading down 1.25 per cent at $3.15 each at time of press.