The New Hope Corporation Limited (ASX: NHC) share price is charging higher on Monday.
In morning trade, the coal miner's shares are up 4.5% to $5.34.
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Why is the New Hope share price charging higher?
The catalyst for the rise in the New Hope share price on Monday has been the release of the company's third-quarter update.
Here's a summary of how the company performed during the period:
- Total ROM coal production down 8% year over year to 6,915mt
- Total coal sales down 21% to 5,492mt
- Underlying EBITDA up 20.6% to $448.1 million
- Closing cash and cash equivalents balance of $827 million
What happened during the quarter?
For the three months ended 28 April, New Hope reported an 8% fall in total ROM coal production and a 21% decline in coal sales. This reflects a solid performance from Bengalla, which was offset by the temporary suspension of activities at New Acland.
As for its earnings, New Hope's underlying EBITDA came in at $448.1 million for the quarter. This was an increase of 14.8% compared to the previous quarter and a 20.6% increase compared to the same quarter last year.
This ultimately led to New Hope finishing the period with cash and cash equivalents of $827.0 million. That's despite the payment of the FY 2023 interim and special dividend, which returned a total of $348.8 million to shareholders earlier this month.
Outlook
Management appears positive on its outlook, which could be boosting the New Hope share price today.
New Acland is being prepared for first coal washing during quarter one of FY 2024, and preparations are underway for major infrastructure works.
Management also commented on demand for its coal from China following the removal of import restrictions, as well as other key markets. It commented:
With import restrictions on Australian coal into China being lifted and the spread between 6000 and 5500 kcal/kg NAR products narrowing, we have refreshed our relationships into the Chinese market and completed our first sales which will be delivered in the next quarter. The robust demand from China of lower energy product has provided an outlet for a portion of our coal over the low season. Imports in key markets are expected to increase in the coming months, with continued tight global supply expected to provide support to pricing for higher CV coal. The outlook for the remainder of calendar year 2023 remains positive, with market forwards continuing to show a contango.
