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New Hope sees lower coal prices

Tuesday, March 24th, 2020

Australian coal producer New Hope Corp said that attributable profit after tax fell 46% in the first half as it flagged slimmer second-half profits on the back of weaker coal prices and lower production.

New Hope posted attributable profit after tax of $69.8 million compared with $120.2 million during the same period a year earlier as an oversupply of thermal coal weighed on prices of its key commodity, it said in a filing to the Australian stock exchange.

Production volumes are expected to be slightly softer in the second half which will push up unit costs, it said.

Lower coal prices expected in the second half and cost increases point to thinner profit in the second half, it added.

Chief Executive Shane Stephan told Reuters that the miner was reviewing its contingency planning, including widening its base of suppliers and also preparing for potential disruption in the medium term as a result of the coronavirus.

New Hope’s production is falling as it waits for approval to expand its mining operations.

It is now waiting on a decision from Australia’s High Court on whether it will allow an appeal by a local environmental group that opposes its stage three New Acland expansion, which it expects in the June quarter.

“We believe and support the Queensland government’s concentration on achieving the best possible health outcome but soon we need to focus on saving as many jobs as we possibly can from the economic damage that the pandemic will bring,” he said.New Hope made 150 people redundant in October at its New Acland mine. Stephan said an approval for the mine could revive these jobs as well as hundreds of others for support workers in mining services industries.

https://www.reuters.com/article/new-hope-results/update-1-new-hope-sees-lower-coal-prices-higher-costs-thinning-2h-profits-idUSL4N2BG60F?rpc=401&
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