New Hope shares jump 8% on FY25 results and big dividend

This miner delivered a strong results despite weak coal prices.

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Key points

  • New Hope shares rose 8% to $4.72 after reporting FY 2025 results, with coal production up 18.1% to 10.7Mt.
  • Despite higher output and lower unit costs, weaker coal prices led to a 10.9% fall in EBITDA and a 7.7% drop in net profit.
  • The board cut the final dividend by 32% to 15 cents per share and introduced a dividend reinvestment plan to support shareholder returns.

New Hope Corporation Ltd (ASX: NHC) shares are having a strong session on Tuesday.

In morning trade, the coal miner's shares are up 8% to $4.72.

This follows the release of the ASX 200 mining stock's full year results before the market open.

New Hope share jump on results day

For FY 2025, New Hope reported group saleable coal production of 10.7Mt. This is up 18.1% from 9.1Mt a year earlier and was within its FY 2025 guidance range.

Management notes that the Bengalla Mine delivered 7.9Mt in coal sales (2024: 7.8Mt) and reduced its unit cost of production despite being impacted by significant weather events and logistics constraints in the Hunter Valley.

Over at the New Acland Mine, it delivered another increase in saleable coal production as the ramp-up of Stage 3 continued.

New Hope's group Free on Board (FOB) cash costs came to $82.4 per tonne in FY 2025. This is down 8.4% from FY 2024's cash costs of $90.0 per tonne. Management advised that this reduction was supported by increased coal production and disciplined cost control.

However, due to weaker coal prices, this couldn't stop the ASX 200 mining stock from posting a decline in earnings for FY 2025. New Hope recorded underlying EBITDA of $765.8 million (FY 2024: $859.9 million) and net profit after tax of $439.4 million (FY 2024: $475.9 million).

In light of this, the New Hope board elected to cut its fully franked final dividend by approximately 32% to 15 cents per share. This brought its total dividends for FY 2025 to 34 cents per share. This equates to a dividend yield of 7.2% at current levels.

The company has advised that it is introducing a dividend reinvestment plan this year. This provides eligible shareholders with the opportunity to reinvest their dividends to acquire additional New Hope shares.

Commenting on its performance, New Hope's CEO, Rob Bishop, said:

Despite navigating logistics constraints, periods of wet weather and a lower coal pricing environment, we've delivered a strong performance for the 2025 financial year. The continued execution of our organic growth plans has provided another considerable increase in saleable coal production, which has underpinned the reduction in our unit costs.

Bishop remains positive on the company's ability to generate strong earnings in a low coal price environment. He adds:

In a low coal price environment, our assets remain resilient and continue to generate solid margins through the cycle, allowing us to provide continued returns to our shareholders. As a result of our performance, we are able to reward shareholders with a fully franked final dividend of 15.0 cents per ordinary share.

In addition, we are pleased to announce the introduction of a Dividend Reinvestment Plan that provides shareholders additional optionality regarding the payment of dividends. Looking forward, we are focused on remaining a resilient, low-cost coal producer and continuing to execute our organic growth plans, which will enable us to continue to deliver shareholder value.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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