Lending Association

New Hope hurt by decline in coal prices

As forecast, after a mixed first half production and pricing report, coal miner New Hope Corporation (ASX:NHC) suffered a 62.4 per cent drop in its first-half profit, hurt by a sharp decline in worldwide coal prices.

Even though the company reported a 28.1 per cent increase in its saleable coal production during the half-year as the La Nina wet and its heavy rain and flooding eased, its average realised prices dropped 57 per cent to $197.03 per tonne.

“A mild winter in the Northern Hemisphere resulted in softer demand in the global energy market, creating downward pressure on prices,” the company told the market on Tuesday.

Coal prices — especially for thermal coal — have normalised following price spikes in 2022 after the Russian invasion of Ukraine.

The company reported a profit attributable to shareholders of $251.7 million for the six months ended January 31, less than half its record profit of $668.6 million a year earlier.

The interim dividend is 17 cents a share, which is better than market forecasts around 12 cents,

But it is both down by around 40 per cent less than the 30 cents a share paid last year and unchanged (in one respect) because the 2023 payout consisted of a 17 cents a share ordinary and a 13 cents a share special payout.

So this year’s payment consists of just an ordinary dividend, which is steady on a year earlier.