New Hope (ASX:NHC) share price up 10% amid huge first half profits and special dividend

Business is booming for this coal miner…

| More on:
Happy man in high vis vest and hard hat holds his arms up with fists clenched celebrating the rising Fortescue share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • New Hope has released its half year results which revealed huge profit growth.
  • The coal miner has been benefitting greatly from sky high coal prices.
  • This has allowed New Hope to reward its shareholders with a special dividend.

The New Hope Corporation Limited (ASX: NHC) share price is having a strong day following the release of its half year results.

On Tuesday morning, the coal miner's shares are up 10% to $3.22.

New Hope share price jumps on strong profit growth

  • Total revenue up 153% to $1,025 million
  • Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up to 582% to $554.4 million
  • Net profit after tax of $330.4 million, compared to a loss of $55.4 million a year earlier
  • Fully franked interim dividend up 325% to 17 cents per share
  • Special dividend of 13 cents per share fully franked

What happened during the first half?

For the six months ended 31 January, New Hope reported a 153% increase in revenue to $1,025 million and a whopping 582% jump in EBITDA to $554.4 million. This was underpinned by a 7% increase in sales volumes to 5.1Mt, a reduction in site cash costs, and a 147% lift in its realised price to $192.4 per tonne.

This ultimately led to New Hope bouncing back from a loss of $55.4 million a year earlier to a net profit after tax of $330.4 million.

Pleasingly for shareholders, the New Hope board has elected to share a significant part of its profits with them. Not only did it increase its fully franked interim dividend by 325% to 17 cents per share, but it has also declared a fully franked 13 cents per share special dividend.

Management commentary

New Hope's Chief Executive Officer, Rob Bishop, was pleased with the half and believes the company is well-positioned to continue generating strong, sustainable shareholder returns.

This is due to the fact that demand for high quality, lower emissions thermal coal is expected to remain robust in the short to medium term as supply remains constrained.

Commenting on the half, he said: "Cost control disciplines that were introduced during the 2021 financial year in response to a period of depressed prices have been embedded across the Group and will ensure that New Hope remains in the lowest cost quartile compared to other producers of seaborne thermal coal."

"Bengalla dealt very well with the challenges from COVID-19 related labour shortages and wet weather to minimise the impact on coal production, which was down only 1 per cent compared to the first half of last financial year. The mine will shortly take delivery of two additional haul trucks which will increase saleable production during the second half of the financial year."

"Strong demand and lower than normal stock levels held by customers have pushed thermal coal prices well above the long-term average. Newcastle Index pricing is currently above US$300/t, and our forward sales book will support robust returns," Bishop added.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Why did the Mineral Resources share price rip 15% higher today?

The iron ore and lithium giant was the fastest riser of the ASX 200 on Thursday.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP is expanding its iron ore and copper production.

Read more »

An engineer takes a break on a staircase and looks out over a huge open pit coal mine as the sun rises in the background.
Resources Shares

4 reasons to buy BHP shares today

A leading expert outlines four key reasons BHP shares are a buy.

Read more »

Businessman walks through exit door signalling resignation
Resources Shares

Pilbara Minerals share price drops as CFO announces resignation

It’s been a challenging few years for outgoing Pilbara Minerals CFO Luke Bortoli.

Read more »

Miner looking at a tablet.
Resources Shares

What happened with the BHP share price in May?

Did you buy BHP shares in May? Here’s how much the ASX 200 miner returned.

Read more »

Two men in hard hats and high visibility jackets look together at a laptop screen at a mine site.
Resources Shares

Should I buy Fortescue shares today?

A leading investing expert offers his verdict on the outlook for Fortescue shares.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Resources Shares

Is this a good time to buy BHP shares?

Should investors jump on the ASX mining shares right now?

Read more »

a miner holds his thumb up as he holds a device in his other hand.
Broker Notes

Why Macquarie expects this ASX 200 copper stock to surge 36% in a year

Macquarie forecasts some hefty gains ahead for the ASX 200 copper miner. But why?

Read more »