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Acland delay still a drag but New Hope profit soars

Business

New Hope Group has shrugged off the decade-long legal fight at its Acland coal mine to post a $111 million pre-tax profit for the year, a turnaround of $337 million from the previous year.

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Record prices pushed the company’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $367 million, a 78 per cent increase and managing director Reinhold Schmidt said the future for the company was positive with strong demand for its product to continue and coal prices expected to remain at historically high levels for “some time to come”.

New Hope’s average realised price for its thermal coal was $101.36 a tonne and it said the benchmark Newcastle 6000 index had almost doubled from levels seen in January to $US150 a tonne.

New Hope also benefited from lower free-on-board costs as it cut costs in the head office and the Bengalla and Acland mines.

Schmidt said the uncertainty surrounding New Acland was impacting the broader business.

The New Acland mine has been substantially scaled back because approvals for an expansion had been held up by a legal fight by local landowners. The case is currently being run in the Land Court but has previously gone as far as the High Court. The State Government has refused to grant licences for the expansion while the legal fight continues.

“Production has steadily declined at New Acland as existing extraction areas are exhausted and the site moves to care and maintenance at the end of the 2021 calendar year,” Schmidt said.

The company’s shares had also surged in recent weeks and were above $2 despite falling back this morning on a much weaker market.

A final dividend of 7 cents a share fully franked was declared taking the full-year payout to 11 cents.

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