New Hope sees earnings hit by lower coal prices and rail disruptions — Capital Brief

The news: New Hope Group halved its annual profit as lower selling prices and delivery delays at its Bengalla mine hit the coal mining company's performance.

The numbers: New Hope reported full-year unaudited EBITDA of $859.9 million, the third-highest result in the company's history, but a 51% decrease from the prior year's $1.75 billion.

EBITDA for the quarter was $216.3 million, compared to $267.7 million a year ago.

The company said its Bengalla mine and New Acland mine contributed to saleable coal production of 9.1 million tonnes and coal sales of 8.7 million tonnes in fiscal 2024, up 26% and 14% respectively from fiscal 2023.

New Hope said its average selling price for thermal coal in the third quarter was $US137.28 ($205.50) per tonne, an increase of 8.7 percent from the previous quarter and a decrease of 3.6 percent from the same quarter last year.

New Hope shares fell 0.8% to $4.98 at market open on the ASX.

The context: The coal mining group said its main Bengalla mine in NSW was hit by logistical bottlenecks in the June quarter. A significant increase in train cancellations due to disruption by protesters, track problems, labour shortages and bad weather meant deliveries from rail customers from across the Hunter Valley region to the Port of Newcastle were hampered.

New Hope, which is majority owned by Washington H. Soul Pattinson, said the thermal coal market was balanced in the quarter and price indices remained at robust levels. Sustained Chinese demand continues to support prices and provides a clearinghouse for thermal coal supplies, it said.

However, despite stabilised price levels, New Hope pointed out that “volatility still exists”, with minor demand or supply shocks able to move price indices by as much as 10%. The miner expects the thermal coal market to remain balanced for the remainder of calendar year 2024, with a potential shortage through 2025, meaning local or global supply disruptions could have “significant positive impacts” on thermal coal prices.