NEW HOPE CASHES IN ON COAL PRICE RECOVERY

NEW HOPE CASHES IN ON COAL PRICE RECOVERY

NEW HOPE Corporation is firing like a high efficiency thermal coal power plant under the power of vastly improved coal and oil prices during the six months to 31 December 2016.

The Brisbane-based diversified energy producer (ASX:NHC) has reported net profit after tax of $54.9 million for the half year, a 265 per cent increase compared to the previous corresponding period.

Revenue was up 63 per cent to $374.6 million, and the business generated net cash of $119.7 million, up 256 per cent. The interim dividend will double to 4 cents per share.

The business was able to ramp up production to 7.4 million tonnes, from 5.1 million on the pcp  to take advantage of the skyrocketing coal price during the period, which almost doubled between June and December to around $107 per tonne.

Total sales for the six months to 31 January 2016 were 4 million tonnes, a 47 per cent increase on the prior corresponding period, suggesting the company achieved an average price of around $90 per tonne for its coal.

The company is trading up 4.3 per cent at $1.82 per share at 12:14 AEDT today on the ASX.

New Hope's Managing Director, Shane Stephan (pictured), says: "This strong operating result is a culmination of several factors including increased sales of four million tonnes, improved spot coal prices and continued cost management efforts.

"Our strategic management of timing in terms of the acquisition of 40 per cent of the Bengalla Joint Venture, combined with the underlining strong performance of our Acland and Jeebropilly mines has delivered."

New Hope has planned a third stage of its New Acland mine, near Toowoomba, and has received approval under the Environmental Protection and Biodiversity Conservation Act from the Federal Government, but the Oakey Coal Action Alliance has taken the matter to the Queensland State Land Court citing environmental concerns, and the case is ongoing.

"Our focus for the future remains on safe production and progressing State Government processes for the approval of the continuation of the Acland mine," says Stephen.

At the Queensland Bulk Handling terminal at Brisbane, 3.1 million tonnes of coal was exported, despite the storm damage on November 13 that put the terminal out of action for four weeks.

The company says that the quick work of its major projects team minimised the amount of production losses. Shipping for the full year will not be materially impacted, though the amount of exported coal for the half year was down by 400,000 tonnes.

The company's growing oil business, Bridgeport Energy Group, produced 141,355 barrels of oil for the period, a 55 per cent increase on the corresponding half year, largely due to the acquisition of the Kanmore, Bodalla and associated fields completed in October 2016. The 10 workovers completed during the period also increased oil production.

The company realised oil prices of $65 per barrel during the period, a 27 per cent increase on the pcp, however the oil division sustained a $2.9 million loss, a substantial improvement on the $16 million loss it suffered in the pcp.

Business News Australia

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