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BHP GROUP

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BHP : Australia's New Hope on hunt for acquisitions beyond coal after bouncing back to profit

09/20/2021 | 09:50pm EDT

MELBOURNE (Reuters) - Australian coal miner New Hope Corp said on Tuesday it swung to a full-year profit as a strong performance on the back of solid coal prices put it in a good position to pursue acquisitions to boost growth.

Coal prices surged in key markets due to a rebound in demand, putting the miner on track to have paid down its debt by year-end, as it scours the world for acquisition opportunities in coal and beyond, said Chief Executive Reinhold Schmidt.

"As a business we are looking at everything that is out there, all commodities," he said, speaking after New Hope booked a net profit of A$79.4 million ($57.63 million) for the year to July 31, compared with a loss of A$156.8 million a year earlier.

New Hope has, however, said that any new M&A opportunities must be at the lower end of the deal cost curve, create value from day one and have long-term operational approvals in place - a key reason it has not emerged as a final bidder for BHP's Mt Arthur coal project, up for sale since mid-2020.

Any New Hope deal is likely to involve alternatives to cash such as an equity arrangement rather than cash, given cycle highs in commodities, Schmidt said.

"When we find the right project, we see that we will not have an issue with funding at all," he said.

The miner has available liquidity of A$565 million, made up of cash A$425 million and undrawn debt A$140 million and forecasts a strong fiscal 2022.

New Hope expects coal prices to remain at historically high levels for some time with robust demand to also continue.

Asian coal prices have hit multi-year highs - close to $180 a tonne - in the past few months as suppliers scramble to meet demand for the fuel from top consumer China, whose economy is slowly getting back on track.

New Hope said it was back to full production and well positioned for the future, even though production at its flagship Bengalla mine in New South Wales was slightly lower than last year due to maintenance shutdowns.

The miner declared a dividend of 7 Australian cents per share. It had suspended its dividend last year to weather the financial impact of the COVID-19 pandemic.

($1 = 1.3782 Australian dollars)

(Reporting by Arundhati Dutta in Bengaluru and Melanie Burton in Melbourne; Editing by Anil D'Silva and Kenneth Maxwell)

By Melanie Burton


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
BHP GROUP 2.80% 38.86 End-of-day quote.-8.41%
NEW HOPE CORPORATION LIMITED -2.73% 2.49 End-of-day quote.75.97%
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Sales 2022 63 012 M - -
Net income 2022 19 009 M - -
Net Debt 2022 7 580 M - -
P/E ratio 2022 7,07x
Yield 2022 10,5%
Capitalization 143 B 143 B -
EV / Sales 2022 2,39x
EV / Sales 2023 2,73x
Nbr of Employees 40 110
Free-Float 58,2%
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Mean consensus OUTPERFORM
Number of Analysts 13
Last Close Price 28,84 $
Average target price 33,63 $
Spread / Average Target 16,6%
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Managers and Directors
Mike Henry CEO, Non-Independent Executive Director
David Mark Lamont Chief Financial Officer
John Kenneth Norman MacKenzie Chairman
Laura Tyler Chief Technical Officer
Malcolm William Broomhead Independent Non-Executive Director
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