Jobs, dividends go as New Hope slumps to $156m loss
New Hope slumped to a $156m annual loss and withdrew its dividend after taking hefty writedowns on its coal mines.
New Hope Corp slumped to a $156m annual loss and withdrew its dividend after taking hefty writedowns on its coal mines amid an industry downturn, with 200 jobs cut due to delays receiving approvals for its New Acland expansion.
The Brisbane-based producer reported a net loss of $156.7m for the 12 months through July, compared with a $210.4m profit the year before, and will not pay a final dividend due to “difficult global economic conditions” and the need to fund investment at its Bengalla mine. It paid a 9c a share dividend last year.
New Hope took $346m of writedowns across its business split between $157m on coal exploration, $110m on its New Acland coal mine in Queensland and $66m on oil producing assets. Its annual underlying profit before tax and impairments fell 69 per cent to $119m from $384m a year earlier.
New Hope has been fighting in court for more than 12 years to be granted approval to build stage three of its New Acland thermal coal mine west of Toowoomba. However, the company said jobs have now been cut due to issues securing mining lease approvals and its existing reserves dwindling.
“As a result of the delays in receiving these approvals, the company has made 175 employees redundant at the New Acland coal mine. A further 23 redundancies were also made at the corporate office and the Brisbane port facility,” New Hope said on Tuesday.
The Queensland government gave key environmental approvals in early 2019, but New Hope still needs the grant of mining and water licenses before it can begin construction of the expansion, and the state government has previously said it will not grant final approvals until the mine’s legal position is settled.
The battle over the third stage of Acland will be heard in the High Court after leave to appeal against earlier court decisions was granted to a group opposed to the mine.
The legal stoush between New Hope and the Oakey Coal Action Alliance, a group of farmers and community members opposed to an expansion of the mine, has been running since 2016, when Queensland’s Land Court recommended against the environmental approval of the mine.
Both thermal and metallurgical coal prices have taken a hit this year with pandemic lockdowns tempering demand for the fuel among customers in Asia. Newcastle coal prices fell by a third from March through July this year due to sluggish demand and the weakening US dollar, New Hope said.
The company noted coal markets “have been and are likely to remain volatile in the near term, however demand for high quality thermal coal remains strong across Asia.”
“Australian producers have been more disadvantaged in local currency terms than our seaborne competitors as investors looked to the relative safety of the Australian dollar as the pandemic and events in the United States unfolded,” New Hope chairman Robert Millner said.
Former Yancoal boss Reinhold Schmidt replaced Shane Stephan as New Hope’s chief executive on September 1.
New Hope shares closed down 2.8 per cent on Tuesday, at $1.21.
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