Sep 24, 2020

New Hope’s bottom line buffeted

New Hope’s bottom line buffeted

New Hope Corporation has reported a lift in coal production of 11.3 million tonnes in the past financial year, but a drop in revenue as lower coal prices and the impact of the New Acland impasse took their toll.

The miner reported a loss of $156.8 million for the year, in contrast to a $210.7 profit in the previous financial year.

The increase in production and sales numbers were driven by the company’s 80 per cent stake in the Bengalla Joint Venture (NSW), with a record production there of 10.3 million tonnes (New Hope share
8.3 million tonnes).

Coal production from New Hope’s Queensland operations totalled three million tonnes – a 38 per cent drop on the previous financial year.

New Hope said that aside from the effects of the global pandemic, a number of factors impacted the business negatively over the past 12 months.

These included lower US$ revenues due to market index pricing conditions and increased cost of sales as the New Acland thermal coal mine in the Darling Downs region nears the end of the Stage 2 life.

The New Acland Stage 3 project continues to be held up as the company waits for final approvals from the State Government.

It said delays in receiving these approvals had resulted in the company making 175 employees redundant at the New Acland coal mine. A further 23 redundancies were also made at the corporate office and the Brisbane port facility.

“The company remains focused on securing all necessary approvals for Acland Stage 3 to target continuity of operations and employment for
the workforce and contractors who rely upon the operation to support their families,” New Hope said in its annual financial report.

Timely approval of Stage 3 could save 125 existing direct jobs and potentially create a further 500 jobs within 18 months.

The company said that while coal markets were likely to remain volatile in the near term, demand for high-quality thermal coal remained strong across Asia.

“For most Asian countries, thermal coal will continue to be a significant component of their energy mix for many years to come, underpinned by continued investment in new coal fired power stations,” it said.

“The company remains well positioned to emerge from the current economic downtown as a stronger, more efficient business.”