Raw coal production during the first quarter of the financial year increased 12.89% from the corresponding three-month period last year while the group’s saleable coal production climbed 12.97% and coal sales jumped 14.55%.
Talking at the company’s annual general meeting, New Hope chairman Robert Millner said a strong export market was behind the rise in coal sales.
“Robust export prices and the decline in the US dollar exchange rate have provided this strong first-quarter financial result,” he said.
Having finalised the $2.45 billion sale of the Bowen Basin-based New Saraji coking coal project to BHP Billiton Mitsubishi Alliance in September, New Hope said total profit for the quarter including the interest revenue earned from the asset sale grew by 263% to $53.8 million.
Of the profit, interest revenue represented nearly 40% as it grew to $21.5 million from $2.5 million in the corresponding period last year.
Millner said the company was anticipating operational profit after tax to be in the range of $125-150 million for the full financial year and he added the company would continue to earn interest on funds invested during the remainder of the year.
“A special dividend of $600 million will be paid to shareholders as part of a final 2009 dividend in November 2009 from these New Saraji sale funds,” Millner said.
“After paying tax on the sale of some $725 million and the proposed special dividend in late 2009, the company will have cash reserves of about $1.1 billion.”
Millner took the opportunity to emphasise the company’s balance sheet.
“New Hope is in a very strong position with no debt at a time when the world credit crunch is making it difficult for businesses to fund new projects,” he said.
“This excellent financial position will allow us to pursue new investment opportunities with certainty.”
Looking ahead the company is expecting strong coal exports to continue.
“Export coal prices are likely to remain firm in Australian dollar terms with lower US dollar coal prices being offset by a lower AUD:USD foreign exchange ratio,” New Hope said in its AGM presentation.
“Despite operational cost pressures our New Acland mine remains one of the lowest cost export coal mines in Australia.”
New Hope said it was finalising plans to lift production at the mine to 4.8 million tonnes per annum from the current 4.2Mtpa.
To drought-proof the mine the company has started construction of a 46km water pipeline from the Wetalla water reclamation plant in Toowoomba.
On different fronts, New Hope said it had made an unrealised gain before tax of around $207 million from its 120 million shares in coal seam gas player Arrow Energy, while the company’s own coal-to-liquids research and development testing for its Acland coal will begin again in a few months.
Shares in New Hope last traded up 12c to $3.41.
