DIVERSIFIED energy company New Hope Corporation (ASX: NHC) has posted first half NPAT of $407.4 million, which included a non-recurring gain on the divestment of Arrow Energy.
For the six months to January 31 2011, the company’s NPAT increased from $111.6 million in the previous corresponding period following a net profit of $326 million from the sale of Arrow Energy shares.
The company - which has also executed a successful takeover of Northern Energy Corporation - posted a net operating profit of $81.1 million with mining operations contributing $44.3 million to the result and $36.8 million earned from investments.
The result was 27.4 per cent lower than the previous first half – largely due to higher exchange rates and increasing costs of transport and weather-related constraints in December and January.
Managing director Rob Neale (pictured), says the company remained a low-cost producer of thermal coal in South East Queensland and is well positioned to take advantage of firming coal prices.
“Recent acquisitions in both the coal and energy sector compliment a very strong balance sheet and provide New Hope with a solid platform for growth in the short to medium term,” he says.
Neale says the company has successfully maintained coal production during recent flooding in South East Queensland and has also increased export sales during the first half by 23 per cent to 2.7 million tonnes.
“As a result, we are in a good position to take advantage of firming coal prices once transport infrastructure in the region has been repaired,” he says.
“First half performance of the company’s coal operations have been pleasing, however the net operating result has been affected by the higher $A:US$ exchange rates, weather conditions and transport costs.
“There have also been reduced interest earnings from the company’s investments following the payment of special dividends to shareholders and tax on the New Saraji sale.”
The divestment of Arrow Energy was completed in August 2010 and was followed by a special dividend of 14 cents per share in November 2010.
New Hope successful takeover offer for Northern Energy Corporation Limited (NEC), has resulted in a 80.8 per cent stake of the coal exploration and development company.
“We started negotiations with NEC towards the end of last year – these things don’t happen overnight and when we made a final offer of $1.85 per share, it was successful,” says Neale.
“We don’t own 100 per cent of NEC, it still has an NEC board and they will continue to develop mines and we will support them in that – we won’t be delaying any projects, we’ll be trying to bring them forward.
“One of this company’s strengths is our balance sheet, so we’re always looking at acquisitions, but our challenge is to ensure we’re getting return to shareholders for that expenditure and that’s why we can’t pay too much for acquisitions.”
NHC shares are trading slightly up at $4.92.
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