The New Hope Corporation Limited (ASX: NHC) share price is taking off this morning after the company released its financial year 2022 earnings.
The New Hope share price opened 6.4% higher at $5.81 before rocketing to a high of $5.90 – representing an 8% gain.
At the time of writing, the S&P/ASX 200 Index (ASX: XJO) energy share is trading at $5.67. That's 3.8% higher than its previous close.
New Hope share price in focus as profits soar 1,100%
Here are the key takeaways from the coal miner's year ended 31 July:
- Revenue lifted 143.5% to $2.55 billion
- Net profit after tax (NPAT) soared 1,138.8% to $983 million
- Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 329.5% to around $1.58 billion
- Net cash from operating activities increased 285% to around $1.14 billion
- Declared a fully franked 31 cents per share final dividend and a 25 cents per share special dividend
- Combined, the two dividends represent a whopping 700% year-over-year increase from last year's seven-cent final dividend.
Lower supply and higher demand saw coal prices surge over the 12 months to 31 July.
The company sold 8,832 kilotons of coal in financial year 2022 for an average price of $281.84 a tonne. For comparison, financial year 2021 saw it sell 10,035 tonnes for an average price of $101.36.
In the final quarter, the company saw a whopping realised average price of $493.52.
New Hope also paid off its debt facility in full. It ended the period with $715 million of cash.
What else happened in FY22?
The 12 months ended 31 July saw the New Hope share price rocket approximately 120% to close the period at $4.39.
The big news from the coal miner was the resignation of its former CEO Reinhold Schmidt.
Schmidt left the company in January. The top job was quickly filled by former chief financial officer Robert Bishop. Rebecca Rinaldi took on Bishop's previous role.
New Hope also acquired a 15% stake in Malabar Resources Limited for $94.4 million in July. Malabar owns an underground metallurgical coal mine in the Hunter Valley.
Update on resources and reserves
The company has also updated the market on its coal resources and reserves this morning.
Updated geological model data and the sale of certain deposits have seen the total coal resources housed by its assets drop to 1,939 million tonnes as of 31 May 2022. That's down from 2,655 million tonnes at the same time last year. Meanwhile, its total recoverable coal reserves fell to 838 million tonnes at the end of May 2022 – down from 923 million tonnes at the same point in 2021.
On top of that, its subsidiary Bridgeport Energy holds net 2P reserves of 6.2 million barrels of oil equivalent (BOE) and 2C resources of 11 million BOE as at 31 July.
What's next?
New Hope didn't provide any new earnings guidance today. Though, it said it expects coal prices to remain elevated for the coming 12 months.
It is looking forward to adding production from New Acland to its portfolio in the coming 12 months, subject to final approvals. It's also aiming to capitalise on the high-price environment, helped by its investment in Malabar Resources and increased production at Bengalla.
It has also committed to work within government policy through the transition to renewable energy, saying its high quality, low emission thermal coal is "critical" in supporting the decarbonisation movement.
Finally, the company is looking at options to return a portion of its surplus capital to shareholders. Some methods it's considering include mergers and acquisitions, share buybacks, dividends, or capital returns.
New Hope share price snapshot
The New Hope share price has gained 144% since the start of 2022. It is also trading 176% higher than it was this time last year.
For comparison, the ASX 200 has dumped 10% year to date and 6% over the past 12 months.
