Bengalla turbocharges New Hope earnings

COST discipline and management of COVID-19 issues at its Bengalla mine in New South Wales has helped New Hope Corporation increase its underlying half yearly earnings almost seven-fold.
Bengalla turbocharges New Hope earnings  Bengalla turbocharges New Hope earnings  Bengalla turbocharges New Hope earnings  Bengalla turbocharges New Hope earnings  Bengalla turbocharges New Hope earnings

Bengalla will shortly take delivery of two additional haul trucks.

Underlying earnings before interest tax depreciation and amortisation came in at $554.4 million for the six months to January compared to $81.2 million for the previous corresponding period.

Net profit after tax for the period was $330.4 million, compared to a loss of $55.4 million previously.

New Hope CEO Rob Bishop said the company was well-positioned to continue generating strong, sustainable returns, with demand for high quality, lower emissions thermal coal expected to remain robust in the short to medium-term as supply remained constrained.

"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," he said.

"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% 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."

Bishop said strong demand and lower than normal stock levels held by customers pushed thermal coal prices well above the long-term average.

"Newcastle Index pricing is currently above US$300 per tonne, and our forward sales book will support robust returns," he said. 

"The company is experiencing significant cash build following the remarkable recovery in coal prices since the lows of FY20."

On December 17 the Land Court of Queensland recommended the New Acland Mine Stage 3 mining lease and the Environmental Authority amendment application be granted subject to conditions.

"Rehabilitation work is now the focus of operations while the company continues to work closely and productively with the relevant state government departments to progress applications to permit and obtain certainty for the Stage 3 expansion of the New Acland operations," New Hope said.

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