NEW HOPE PROFIT PLUNGES
Written on the 17 September 2013
LOW export prices and a hit to investments in fellow mining companies has hurt New Hope Corporation’s (ASX:NHC) full year net profit.
Net profit after tax, before non-recurring items, is $125 million for the year ended June 30, down 27 per cent from 171.1 million the previous year.
Non-recurring items take the net profit is down 55 per cent to $74.1 million from $167.1 million largely caused by an impairment to the carrying value of investments in Dart Energy Limited, Westside Corporation Limited and the Quantex group of companies.
Revenue is down 14 per cent to $656.4 million, from $767.1 million the previous financial year.
New Hope managing director and CEO Rob Neale (pictured) says it was a reasonable result, considering the conditions.
“Against a backdrop of difficult economic conditions for Australian coal producers, New Hope’s focus on increased productivity, low-cost operations and tight management has driven a reasonable FY2013 result,” he says.
Cost of sales was reduced by 10.1 per cent to $36 million. Administration costs reduced by $9.9 million, or 37.9 per cent.
The higher AUD:USD exchange rate also hurt the company, while a three-week rail outage due to rain resulted in reduced production in early 2013.
It was also forced to taper production from West Moreton due to the market conditions and mining at Oakleigh stopped in the first quarter of this year following the recovery of all economic coal reserves.
Meanwhile the company’s acquisition and expansion of gas producers and explorer Bridgeport Energy went ahead. Five new development wells were successfully drilled, completed and placed on production at the Inland and Utopia fields during the year. A sixth well was drilled, cased and suspended in the Utopia field.
The company has maintained $1.25 billion in cash deposits and it will produced a fully-franked final dividend of 5.0 cents and special dividend of 5.0 cents to be paid on November 5, with an ex-dividend date of October 22.
“As a vertically integrated diversified energy company, New Hope is well positioned to withstand current coal market conditions and continue to deliver shareholder value, while being primed to take advantage of future growth opportunities as they arise,” says Neale.
During FY2013, clean coal production totalled 5.8 million tonnes and total sales were 6 million tonnes, a decrease of 7 per cent and 4 per cent respectively.
The Queensland Bulk Handling (QBH) facility, New Hope’s 100 per cent-owned coal terminal at the Port of Brisbane, exported 8.73 million tonnes of coal on 113 vessels in FY2013, in line with management expectations.
The company negotiated with Port of Brisbane for access to additional land for potential expansion, should additional rail capacity become available.
NHC was trading down 6.76 per cent at $4.00 late this morning.