This article first appeared on GuruFocus.

Underlying EBITDA: $215 million. Statutory Net Profit After Tax: $54 million. Run-of-Mine Coal Production: 7.9 million tonnes. Saleable Coal Production: 5.5 million tonnes. Coal Sales: 5.6 million tonnes. Average Sale Price: $139 per tonne, approximately 20% lower than the previous period. Cash Flows from Operating Activities: $185 million. Margin per Tonne: $41 per tonne. Interim Dividend: $0.10 per share, fully franked. Return to Shareholders: $124 million, representing the fully franked FY25 final dividend of $0.15 per share.

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Release Date: March 17, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

New Hope Corp Ltd (NHPEF) delivered an underlying EBITDA of $215 million despite lower coal pricing. The company declared a fully franked interim dividend of $0.10 per share, showcasing its commitment to shareholder returns. New Acland Mine's ramp-up contributed significantly to maintaining saleable coal production volumes. The company generated $185 million in cash flows from operating activities, enabling reinvestment and shareholder returns. New Hope Corp Ltd (NHPEF) maintains a strong focus on safety initiatives to improve its all injury frequency rate.

Negative Points

The 12-month moving average TRIFR increased from 3.22 to 3.8, indicating a decline in safety performance. Lower coal prices, approximately 20% lower than the previous period, impacted both underlying EBITDA and cash flows. Bengalla Mine faced lower ROM coal production due to reestablishment of prestripping activities. The thermal coal market was affected by economic uncertainty, oversupply, and weakened demand. The company's cash balance decreased by almost $100 million over the half, raising concerns about long-term cash management.

Q & A Highlights

Q: How is the Iranian conflict affecting diesel inputs and fuel security for New Hope Corp? A: Robert Bishop, CEO, explained that diesel usage accounts for about 13% of their cost base, with a potential impact on overall costs. However, the increase in coal prices should offset diesel cost increases. They are monitoring the situation closely and have no immediate concerns about fuel supply security.

Q: Has there been a change in customer demand due to global energy volatility? A: Bishop noted that New Hope has long-term contracts with consistent demand from existing customers. The company benefits from increased coal prices, and while demand remains stable, it could change if there are significant impacts on global energy supplies.

Story Continues

Q: What factors influenced the decision to pay a higher dividend this period? A: The decision was based on strong first-half performance and the company's low-cost asset base, allowing them to pay dividends even at the bottom of the coal price cycle. The situation in Iran will be considered for future dividend decisions.

Q: Why is there a discrepancy between coal and gas pricing, and are there any changes in coal flows? A: Bishop acknowledged the ongoing discount between coal and gas prices, which could change if gas supplies are constrained. He noted no significant changes in coal flows, with long-term customers primarily in Asia.

Q: What is the outlook for Bengalla Mine's production and costs? A: Bengalla Mine is expected to return to a consistent 13.4 million tonnes per annum run rate in the second half, with strip ratios and costs aligning with life-of-pit expectations.

Q: Can you clarify the impact of depreciation on financials? A: Rebecca Rinaldi, CFO, explained that higher depreciation was due to the completion of growth projects at Bengalla and Acland Mines. Future impacts will include capital expenditures for ongoing projects.

Q: What is the impact of Indonesia's export controls on thermal coal? A: Bishop stated that while Indonesia's export controls initially impacted prices, the current situation in Iran has had a more significant effect on coal pricing.

Q: Why has the on-market share buyback been extended? A: Rinaldi explained that the buyback provides flexibility to capitalize on undervalued share prices, although dividends remain the primary method of returning value to shareholders.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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