New Hope Corporation shares received a boost on Tuesday after the coal, oil and gas producer delivered a net profit before tax of $111 million for the year ended 31 July 2021, turning around a loss of $226 million in 2020. The result coming following a year of strong operational performance and fiscal discipline across the group.
New Hope noted that the Newcastle 6000 Index hit 10-year highs by financial year-end, rapidly recovering from depressed market conditions experienced at the start of the financial year. As a result, the company achieved an average realised price of $101.36/t in 2021. At 31 July 2021, the Newcastle 6000 Index had almost doubled from January 2021 levels, to USD$150 per tonne.
The company also benefited from reduced underlying cash costs as a result of cost savings implemented at both its Bengalla and New Acland mines, and the rationalisation of the Brisbane corporate office.
Production at Bengalla was down slightly on the previous year, due to a midlife shutdown of the dragline for scheduled maintenance, however, the operation is back to full production. The transfer of an excavator from New Acland has provided Bengalla further enhanced the capacity of the site’s truck and shovel fleet.
The company’s flagship Bengalla operation remained focused on consistent production and maximising low-ash, high-energy product, taking advantage of the current rising index price environment.
New Hope also noted that uncertainty of approvals for New Acland Stage 3 and the transition to care and maintenance at New Acland continues to impact the broader business. Production has steadily declined at New Acland as existing extraction areas are exhausted and the site moves towards care and maintenance at the end of the 2021 calendar year.
Chief Executive Officer, Reinhold Schmidt said the future for the company remains positive with strong demand for its product to continue and coal prices expected to remain at historically high levels for some time to come. “The restructure of our corporate office has resulted in a more agile, refocussed and efficient business environment, more suited to the needs of the Company overall. Sustained cost management across the business will bring a continuation of the improved results we achieved in the second half of this financial year.”