New Acland boosts New Hope

NEW Hope has reported an interim net profit before non-recurring items of $A111.6 million as production increases from its New Acland mine in Queensland helped lift export sales by 31.5% to 2.2 million tonnes.

Lou Caruana

The net profit figure for the six months to January 31 was 15.8% lower than the previous corresponding period but slightly higher than the company’s guidance of $110 million.

After non-recurring items, the net profit was 93.9% lower year-on-year. New Hope booked the sale of its New Saraji coal mine to BMA for $2.45 billion in the previous period.

Revenues for the half were up by 19.4% to $367.9 million.

Chief executive Rob Neale said lower coal prices and unfavourable currency exchange rates had affected the earnings result but the company would continue to pursue increased production from its Queensland coal mines.

“We are maintaining our full-year sales forecast of about 5.5 to 6 million tonnes, which is highly dependent on rail capacity,” he said.

“New Hope remains a low-cost producer and we will continue to increase our production and sales.

“Our current expansion projects, especially at New Acland and our Queensland Bulk Handling port facility, remain on schedule and on budget.”

The company will back Royal Dutch Shell and PetroChina's revised $3.44 billion bid for coal seam gas group Arrow Energy, New Hope chairman Robert Millner said.

New Hope, which holds 16.7% of Arrow, will vote in favour of the demerger scheme and acquisition scheme for all the shares it owns.

Millner said New Hope continued to expand production efficiency, with total coal sold being 24.3% higher year-on-year at 2.8Mt.

The New Acland mine remains the company’s major production source with some 2.215Mt produced during the half-year – a 7.3% increase year-on-year.

Expansion of the New Acland mine to the production rate of 4.8Mt per annum was completed during the period, ahead of time and on budget.

The rest of New Hope’s half-year coal production of 600,000t came from the West Moreton region, which was 58.3% higher year-on-year.

Planning has begun in anticipation of a new mining lease at the New Acland mine which, if granted in late 2010 or early 2011, will enable production capacity to be incrementally increased to 10Mtpa, subject to market conditions, rail and port capacity.

Neale said Queensland Rail’s performance, which has been affected by recent rains in central Queensland, was “variable”

“Their performance to date has been up and down but so far so good,” he said.

“It changes from month to month. Their maintenance performance has been less than desirable.”

He said New Hope’s operations would not be affected by the Queensland government’s proposed privatisation of Queensland Rail as they lay in the western region, which is outside the area of the proposed asset sell-off.

Jeebropilly will continue at a nominal production capacity of 900,000tpa during the second half of 2010, with New Oakleigh nominal production remaining at 230,000tpa.

The company’s QBH port expansion, which will provide a total site capacity of up to 10Mtpa, is on schedule and within budget, with completion due in late 2010.

New Hope’s share price was 9c higher at $4.97 in morning trade.

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