New Hope holds its Annual General Meeting
20 November 2014
The New Hope Group reported a strong operational performance at its annual general meeting in Ipswich today.
New Hope Chairman Robert Millner told the meeting the company’s coal mining and logistics operations remained profitable despite the financial result being impacted by lower export coal prices and the high Australian dollar.
“The financial result was achieved against a backdrop of ongoing difficult market conditions for the coal sector, with New Hope’s continued focus on cost efficiencies ensuring its coal operations remain profitable,” he said.
“New Hope anticipates the current challenging market conditions to continue in the 2015 financial year.”
New Hope Managing Director Shane Stephan said global demand for thermal coal remained strong, but oversupply would continue to depress spot thermal coal prices in FY2015.
“In the medium-term, we expect demand for high-quality export coal to continue to grow, particularly from expanding Asian economies, while significant new supply is unlikely given the current downturn,” he said.
“As a result, New Hope will continue to focus on safe and efficient coal production in FY2015, while preparing the Group for the expected, gradual recovery in spot thermal coal prices in the coming 12-18 months.
“The revised New Acland Coal Mine Stage 3 Project remains a key part of the Group’s preparation for an upturn in market conditions.
“New Hope will continue to work with the relevant authorities, and in consultation with the community, to advance approvals in FY2015.
“If the Acland expansion is not approved, current reserves would be depleted during 2017 at current mining rates.”
Mr Stephan said New Hope had maintained its strong financial position, entering the financial year with cash and cash equivalents of $1.1 billion.
“The Group’s balance sheet provides the capacity for asset acquisitions to support New Hope’s long-term profitability, and it is actively assessing opportunities,” he said.
“The Group remains well-placed to take advantage of attractive opportunities created by current market conditions.
“New Hope continues to adopt a longer-term view of global coal markets and, as a low-cost producer, is well positioned to withstand the current downturn in spot thermal coal prices.
“This approach means the Group will maintain prudent expenditure on exploration and approvals to allow new capacity to be brought on-line when conditions improve.”