Ground Breakers: A New Hope for coal investors as shareholders cheer miner's dividend

New Hope shareholders including Soul Patts claim a share of $253 million in dividends
The NSW and Queensland coal miner made a more than $1 billion profit in FY23
Coal and gold miners lift while iron ore and lithium stocks falter

New Hope Group (ASX:NHC) shares have run higher after the New South Wales and Queensland thermal coal miner banked a stunning net profit after tax of over $1 billion, offering a final and special dividend of $253 million.

Over $90 million will go into the hands of major shareholder Washington H Soul Pattinson (ASX:SOL).

The final dividend will include a 21c per share payout along with a special divvie of 9c. On top of the 40c offered earlier in the year the dividend yield was a solid 13%, demonstrating the continued strength of the Australian coal sector even as prices have fallen from the record highs seen late last year.

Much of that, which included a brief run for thermal coal to over US$450/t amid energy security concerns after last year’s Russian invasion of Ukraine, has been captured in the FY23 results.

New Hope saw an 11% lift in EBITDA to $1.746 billion, with NPAT rising from $983m to $1.087b despite saleable coal production, largely from the Bengalla mine in the Hunter Valley, dropping from 7.9Mt in 2022 to 7.2Mt in 2023 (9Mt on a 100% basis).

Net cash rose 34% to $1.524b, leaving the miner well stocked with $730.7m in the bank. Average realised prices for the full year sat at a record of $346.73/t, pumping revenues 8% higher to $2.754b.

New Hope expects to see output next year from its New Acland Stage 3 development in Queensland after gaining a long-contested approval which saw mining begin in the Manning Vale East Pit in May, with first coal washed earlier this month.

The first trainload from the 6.5Mtpa Maxwell mine, owned by New Hope’s 15% held Malabar Resources, was also unloaded at the Port of Newcastle.

Despite a fall in thermal coal prices back to around US$160/t and long term uncertainty from the energy transition, CEO Rob Bishop said Australian thermal coal remained “critical” to the transition.

“The investment in Malabar aligns with our strategy to invest into low-cost coal assets with long-life approvals. The acquisition diversifies our portfolio and is expected to provide attractive investment returns over the life of the project,” he said.

“We believe high quality, low emission Australian thermal coal is critical to supporting the transition to a decarbonised economy. Our customers rely on our coal to produce secure, essential energy which supports their standards of living and economic development opportunities.

“The Company’s long-term strategy is to safely, responsibly and efficiently operate our low-cost, long-life assets throughout the energy transition, with a focus on disciplined capital management, providing valuable returns to our shareholders.”

Iron ore and battery metals down, coal and gold hold the fort

The materials sector is on a near 0.5% loss, with red days for iron ore and lithium producers doing little to help matters as commodities with exposure to China pulled back overnight.

Gold, back above $3000 per ounce on an Aussie dollar basis, was a better story, with Evolution (ASX:EVN) and Newcrest (ASX:NCM) among the top performers.

Mid-tier goldies like Ramelius (ASX:RMS), Emerald Resources (ASX:EMR) and Perseus (ASX:PRU) saw stronger gains.

Newcrest shares lifted 1.35% as its hunter Newmont revealed to the US market overnight that the Foreign Investment Review Board in Australia had given the all-clear for its takeover of Australia’s biggest gold miner, which will go to a shareholder vote later this year.

New Hope meanwhile was joined by Yancoal, Whitehaven (ASX:WHC) and Coronado (ASX:CRN) in the green as coal miners took high spots on the daily leaderboard.