WRITE-DOWNS HINDER NEW HOPE
Written on the 24 March 2015
ENERGY company New Hope Corporation Limited (ASX: NHC) has incurred a revenue slowdown and beared the brunt of oil and gas write-downs, although managed to boost its first half NPAT excluding these items.
NHC has posted a NPAT before non-regular items of $34.2 million, compared to $22.7 million for the prior corresponding period.
However, non-regular impairments after tax of $58.5 million were incurred during the half year period against the carrying value of assets in the group's oil and gas operations and investments.
The company reports that it benefitted from the easing of Australian dollar exchange rates, strong sales and production values, increased oil production, and cost reductions over the period.
Further weakening in export coal prices and adverse movements in the oil price hindered its performance.
NHC managing director Shane Stephan (pictured) says the result is positive considering the current business environment.
He says NHC is well placed to see out the downturn, and an announcement to the ASX says the company is "actively pursuing acquisitions".
"This is a strong operating result at a time of continuing challenges for Australian coal producers," says Stephan.
"Our focus for the future remains on working with state and federal government agencies to assist them with their review of the next stage of the Acland development.
"We are also actively pursuing asset-level acquisition opportunities, with a focus on either adding additional near-term coal production capacity, or complementing our existing portfolio of longer-term development projects.
"Market conditions for Australian coal producers are challenging at present; however, New Hope has efficient operations and is in a robust financial position, so we are well placed to see out the current downturn and take advantage of these conditions to grow the business for the future."
The company recognises US dollar prices are likely to drop in the short term, but this will be partially offset for its operations by a weaker Australian dollar.