How Did New Hope Boost Coal Output Despite Market and Weather Challenges?
New Hope Corporation Limited posted a slight dip in revenue and net profit for FY2025 but achieved a notable 18% rise in saleable coal production, driven by growth at New Acland Mine and steady output at Bengalla Mine.
- Revenue down 0.3%, net profit after tax down 7.7%
- Saleable coal production up 18.1%, led by New Acland ramp-up
- Underlying EBITDA declined 11% to $766 million
- Fully franked final dividend declared at 15 cents per share
- Dividend Reinvestment Plan introduced for final dividend
Financial Performance Amid Market Challenges
New Hope Corporation Limited’s 2025 financial year results reveal a company navigating a complex market environment with resilience. Despite a marginal 0.3% decrease in revenue to $1.8 billion and a 7.7% fall in net profit after tax to $439 million, the company delivered an 18% increase in saleable coal production. This growth was primarily driven by the ongoing ramp-up of operations at the New Acland Mine and sustained output at the Bengalla Mine.
Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at $766 million, down 11% from the previous year, reflecting lower coal prices and operational headwinds. The company maintained disciplined cost control, reducing its free on board cash costs by 8.4% to $82.4 per sales tonne, underscoring the low-cost nature of its assets.
Operational Highlights and Challenges
Operationally, New Hope faced significant weather disruptions and logistics constraints, particularly at Bengalla Mine, where flooding and rail cancellations caused stockpile and shipping delays. Nevertheless, Bengalla managed to hold production steady, while New Acland Mine’s production surged, supported by new pits and night shift operations.
These operational dynamics contributed to a 21% increase in coal sales volumes to 10.5 million tonnes, with Japan remaining the largest export market, accounting for 44% of coal sales revenue. The company also increased its equity stake in Malabar Resources Limited to 22.98%, enhancing exposure to metallurgical coal through the Maxwell Underground Mine.
Shareholder Returns and Capital Management
In line with its commitment to shareholder returns, New Hope declared a fully franked final dividend of 15 cents per share, payable in October 2025. This follows interim and prior final dividends of 19 and 22 cents respectively. The introduction of a Dividend Reinvestment Plan (DRP) for the final dividend offers shareholders the option to reinvest dividends into additional shares, reflecting a strategic move to balance cash returns with capital growth.
The company also initiated an on-market share buy-back program of up to $100 million, though activity slowed due to share price movements. As of July 2025, 2.5 million shares had been repurchased at an average price of $3.60 per share, signaling management’s confidence in the company’s intrinsic value.
Sustainability and Climate Risk Management
New Hope continues to embed sustainability into its operations, with a focus on safety improvements, community engagement, and environmental stewardship. Safety metrics improved notably, with the Total Recordable Injury Frequency Rate (TRIFR) dropping 35% to 3.22, now below the industry average for New South Wales open-cut mines.
The company’s climate-related disclosures highlight a proactive approach to managing transition and physical risks. New Hope is subject to Australia’s Safeguard Mechanism, requiring progressive emissions reductions, which it currently manages through the purchase of carbon credits and operational efficiency initiatives. Exploration of carbon sequestration projects on agricultural lands is underway, reflecting a forward-looking strategy to align with evolving regulatory landscapes.
Strategic Outlook and Market Positioning
Looking ahead, New Hope remains confident in the medium-term outlook for thermal coal, supported by expected supply shortfalls due to ageing assets and underinvestment in new projects globally. The company’s low-cost, long-life assets position it well to capitalize on this demand, particularly in Asian markets.
Ongoing organic growth initiatives, including exploration drilling at EL9431 and conceptual studies at AL19, aim to extend mine life and production capacity. The recent divestment of the Bridgeport oil and gas business post-year-end signals a sharpened focus on core coal operations.
Overall, New Hope’s 2025 results reflect a company balancing operational challenges with strategic growth and sustainability commitments, delivering shareholder value while navigating a dynamic energy transition landscape.
Bottom Line?
New Hope’s disciplined execution and sustainability focus set the stage for navigating evolving market and regulatory landscapes ahead.
Questions in the middle?
- How will New Hope’s increased stake in Malabar Resources influence its exposure to metallurgical coal markets?
- What impact will evolving climate policies have on New Hope’s long-term coal demand and asset valuations?
- How effectively can New Hope mitigate logistics and weather-related disruptions to sustain production growth?
