New Hope shares crash 12% on profit crunch and big dividend cut

Let's see what the coal giant reported this morning.

New Hope Corporation Ltd (ASX: NHC) shares are sinking on Tuesday morning.

At the time of writing, the coal miner's shares are down 12% to $4.63.

This follows the release of New Hope's half-year results before the market open.

A man holds his head in his hands after seeing bad news on his laptop screen.

Image source: Getty Images

New Hope shares sink on results day

For the six months ended 31 January, New Hope posted a 20.1% decline in revenue to $814.4 million.

This reflects a modest 0.4% increase in group saleable coal production to 5.5Mt, which was offset by weaker realised prices.

The company notes that its average realised sales price, excluding hedging, was $137.80 per tonne, which is down 20.4% from $173.30 per tonne in the prior corresponding period.

As well as lower realised coal pricing, New Hope was exposed to increased prime overburden movement and lower non-regular gains, including the derecognition of deferred tax assets in relation to the divestment of Bridgeport Energy.

This led to the company reporting underlying EBITDA of $214.8 million, which is down 58.5% from $517.3 million a year earlier.

On the bottom line, net profit after tax was down a massive 84% to $54.3 million.

Dividend cut

New Hope revealed that it recorded net cash flow from operating activities of $185 million, down from $316.9 million a year earlier.

In light of this, the New Hope board cut its interim dividend almost in half. It declared a fully franked 10 cents per share payout, which is down from 19 cents per share in the prior corresponding period.

Commenting on the results, New Hope's CEO, Rob Bishop, said:

In a lower coal price environment, our assets remain resilient and continue to generate solid margins. As a result of our performance, we are able to reward shareholders with a fully franked interim dividend of 10.0 cents per ordinary share.

Looking ahead, Bengalla Mine is expected to return to the 13.4Mtpa ROM coal production rate (100 per cent basis) during the second half of the 2026 financial year. In addition, New Acland Mine will continue to ramp up production and is scheduled to begin mining activities in the Manning Vale West pit during the final quarter of the 2026 calendar year. 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 delivering value to shareholders.

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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