New Hope Corporation (ASX: NHC) has reported a 35% surge in net profit after tax (NPAT) to $340.3 million for the first half of FY25, driven by higher coal production and lower unit costs. The strong financial performance has paved the way for increased shareholder returns, including a fully franked interim dividend of 19 cents per share and the launch of a $100 million on-market share buyback.
Key Financial and Operational Highlights
- Coal production surged 33% to 5.4Mt, reflecting continued growth at Bengalla and New Acland mines.
- Cash costs fell 23.5% to $55.5/t, demonstrating disciplined cost control.
- Underlying EBITDA rose to $517.3 million, up from $424.8 million a year earlier.
- Net cash flow from operations more than doubled to $316.9 million.
- Available cash stood at $805 million as of December 2024.
- Malabar Resources stake increased to 22.97%, reinforcing New Hope’s focus on long-life, low-cost assets.
- Interim dividend of 19 cents per share, up from 17 cents last year, payable on 9 April 2025.
- $100 million share buyback announced to enhance shareholder value.
Coal Production & Expansion Progress
New Hope’s Bengalla Mine has now reached steady-state operations at 13.4Mtpa following its growth project, while New Acland Mine is on track to hit a 5Mtpa run rate by 2027 after overcoming legal challenges. The recent court decision clearing the path for the New Acland Stage 3 water license provides long-term certainty for the project and the surrounding community.
CEO’s Perspective
New Hope CEO Rob Bishop highlighted the company’s ability to increase earnings despite declining coal prices, underscoring its low-cost operational strength.
“Our disciplined approach to cost control and operational execution continues to deliver results. With strong cash generation, we’re pleased to reward shareholders with an increased dividend and the launch of a $100 million buyback.”
$100M Share Buyback – A Capital Management Boost
The on-market buyback, set to begin around 1 April 2025, will run for up to 12 months, depending on market conditions. The buyback aims to enhance shareholder value by reducing the number of shares on issue, ultimately improving earnings per share, return on equity, and dividend per share.
New Hope’s Chairman, Robert Millner AO, emphasized the company’s commitment to returning capital to shareholders while maintaining a strong financial position.
“This buyback reflects our confidence in New Hope’s long-term outlook and our commitment to disciplined capital management.”
Looking Ahead
With robust financials, growing production capacity, and disciplined cost control, New Hope remains well-positioned for sustained profitability. The company continues to explore future capital management initiatives, including maintaining fully franked dividend payments.
