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New Hope (OTC:NHPEF) Group (NHG) reported a 30% decline in its underlying EBITDA for the fourth quarter of 2024, totaling $213 million. Despite this quarterly decrease, the company's half-year results showed a 22% increase year-on-year, reaching $517 million. The company's stock, National HealthCare Corporation (NHC), closed at $102.76 in aftermarket trading, reflecting a slight decrease of 0.76% from its previous close. According to InvestingPro data, NHC has demonstrated remarkable stability with low price volatility, trading between $87.03 and $138.49 over the past 52 weeks.
Key Takeaways
- New Hope Group's quarterly underlying EBITDA fell by 30%.
- Half-year EBITDA increased by 22% year-on-year.
- The company maintained its production guidance, targeting 5 million tonnes by FY 2027.
- Strategic investments continue in high-quality metallurgical coal.
Company Performance
New Hope Group's performance showed a mixed picture with a significant decline in quarterly EBITDA but a robust half-year growth. The company increased its coal production, with group ROM coal production rising by 5% quarter-on-quarter. Despite the challenging market conditions with fluctuating coal prices, New Hope Group maintained its strategic focus on low-cost, long-life coal assets. InvestingPro analysis reveals the company maintains a strong financial position with a GREAT overall health score of 3.36, operating with a moderate debt level and achieving a solid gross profit margin of 37.61%.
Financial Highlights
- Underlying EBITDA for the quarter: $213 million (down 30%)
- Half-year Underlying EBITDA: $517 million (up 22% year-on-year)
- Cash flows from operational activities: $317 million
- Average realized price: $176 per tonne (10% lower than previous period)
Outlook & Guidance
New Hope Group maintained its guidance ranges, with a focus on achieving a production run rate of approximately 5 million tonnes per annum by FY 2027. The company also plans to reach near 5 million tonnes by the end of FY 2026. Dividend payout guidance remains at 50% of net profit after tax (NPAT). Notably, InvestingPro data shows the company has maintained dividend payments for 22 consecutive years, with a current dividend yield of 2.37%. For deeper insights into NHC's financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Executive Commentary
CEO Rob Bishop emphasized the company's commitment to organic growth and disciplined unit cost control. "We're actively progressing Manningvale West," he stated, highlighting the development of the Manning Vale West mining area as a key focus for future growth.
Risks and Challenges
- Market volatility: Fluctuating coal prices could impact profitability.
- Operational disruptions: Scheduled shutdowns and logistics challenges may affect production timelines.
- Regulatory changes: Transitioning from the Japanese Reference Price to index-linked pricing could influence revenue streams.
Q&A
During the earnings call, analysts inquired about sales mix variations, which were attributed to timing-related factors. The company also addressed logistics challenges tied to the Cross River Rail project and clarified its investment strategy in Malabar Resources.
Full transcript - National HealthCare Corp (NHC) Q2 2025:
Rob Bishop, Chief Executive Officer, New Hope Group: Thank you. Good morning, everyone. Thank you for joining our call today. I'm Rob Bishop, Chief Executive Officer of New Hope Group. I'm joined here by Rebecca Rinaldi, our CFO and Dom O'Brien, Executive General Manager and Company Secretary.
This morning, we released our quarterly production report for the second quarter of the twenty twenty five financial year. Hopefully, you've had a chance to go through the report. But in any case, I'll briefly step you through our key highlights before we open up the line for our Q and A session. It's been a solid operational year sorry, quarter, and we're really pleased with the results for the first half of the twenty twenty five financial year. Our twelve month moving average trigger was 4.4 at the end of the quarter, which was 15% lower than the previous quarter.
We know we have more work to do and it has certainly remained and will always be a key focus for us, so it's positive to see those safety metrics improve. Group ROM coal production was 4,200,000 tonnes, up 5% on the last quarter and group saleable coal production was 2,700,000 tonnes, in line with the previous quarter. In December, Bengala had an annual CHPB shutdown, which naturally resulted in lower production, but those volumes are offset by the continued ramp up at New Auckland, which had a very strong quarter. As you would all be aware, in January, the Oakey Collaps and Alliance, or OCA, withdrew its appeal proceedings in the land quarter Queensland relating to the associated water license for New Auckland Stage 3. The conclusion of Oka's legal challenge ends an eighteen year approval process and provides certainty for our people and the broader community.
It's a significant milestone for the business and provides a clear runway to increase production to approximately 5,000,000 tonnes per annum by developing the Manning Vale West mining area. Underlying EBITDA was $213,000,000 for the quarter, down 30% largely due to lower realized pricing, but it's worthwhile noting that the first quarter EBITDA results of $3.00 $5,000,000 was extremely strong. During the quarter, we acquired an additional 3% stake in Malabar Resources Limited for $2 per share, bringing our total equity interest to just under 23%. This acquisition aligns with our strategy of investing in low cost coal assets with long life approvals and provides our business with the exposure to high quality metallurgical coal. Turning to our half year results.
Group run production was 8,300,000 tonnes and saleable coal production was 5,400,000 tonnes, up 5633% respectively on the first half of twenty twenty four. This result reflects the continued execution of our organic growth pulp plants where we targeted significant production increases. Our average realized price was $176 per tonne, 10% lower than the first half of twenty twenty four. Nonetheless, we continue to remain disciplined with our unit cost control with Bengala achieving an FOB cash cost of $68 per tonne, representing a 16% reduction. So overall, high volumes and lower costs have contributed to an underlying EBITDA of $517,000,000 an increase of 22% compared to the first half of twenty twenty four.
In addition, we generated $317,000,000 in cash flows from operational activities, which was a significant improvement compared to the same period last year. Looking ahead, we remain focused on increasing our production base and maintaining our low cost advantage. Our performance in the first half of the year has us on track very well it has us tracking very well in terms of our guidance ranges, which remain unchanged. Of course, we'll have more to say when we release our full financials for the half year in just a few weeks. But I'm sure you have plenty of questions, so I'll hand over to the operator to start the Q and A session.
Thank you.
Call Operator: Your first phone question comes from Daniel Roden with Jefferies. Please go ahead.
Daniel Roden, Analyst, Jefferies: Good afternoon. Thanks for taking my question. First one, I just wanted to touch on, I guess, the sales mix and lower proportion of low ash sales. Is this like a reversal from the main trends? Like are we going to see a main reversal?
Is this a market dynamic kind of thing that we're seeing? Or is it an ore body issue at kind of both Bangala and New Acorns? Like what's maybe just give a bit more color on, I guess, the sales mix kind of in the quarter and going forward, please?
Rob Bishop, Chief Executive Officer, New Hope Group: Sure. No problem. That's correct. We did have a high proportion of higher ash compared to normal. That's really just a timing of pit sequence and stockpiles as we entered the quarter.
It's not an indication of the pit moving towards a high ash percentage, so it's really just timing.
Daniel Roden, Analyst, Jefferies: Yes, okay. And maybe just on the logistics, there's a comment in the quarter on the Cross River Rail project that's going on and its potential impacts to New England. Can you help us to outline maybe what those impacts are? And I guess, until that project is completed in 2029 in its revised form, I guess what are the expectations and what are the, I guess, levers at Pet Sight you can kind of pull on and draw on for the logistics for New York ones?
Rob Bishop, Chief Executive Officer, New Hope Group: Sure. So as you pointed out, that project has been delayed. And really, the issue that presents us is around planning for when those shuts are going to be. So we've engaged with government closely to ensure we can plan around those shuts. We do have significant stockpile capacity both at Acland at the site, at the rail loadout and also at the port.
So we can manage it. It's more just a case of the potential impact of that extending out and further shuts, which was more than planned for our ramp up. We feel it's manageable, but it's just a case of working closely with government to assure it doesn't disrupt the ramp up for the mine.
Daniel Roden, Analyst, Jefferies: Okay. And I might squeeze one for you, if I can. But Malabar, you've executed on your 3% creep kind of rule over six months. So you haven't treated your mandatory takeover provisions. I guess, what's the strategy there?
Like are you going to wait another six months and then pull the trigger on another 3%? Or are you happy where you're sitting at the moment? Maybe just a bit more strategy around that Malabar equity interest, please?
Rob Bishop, Chief Executive Officer, New Hope Group: Sure. So that's correct. We were capped out at the 3%. We weren't interested in making a takeover of that asset. Very comfortable with the shareholding group at Malabar and the management team there to, I guess, to provide a bit more color.
And I think we stated it in our release. We were approached by another major shareholder for that 3%. From our perspective, fair price, obviously, the other shareholder felt that it was a fair price as well and it really aligns with our strategy, the Maxwell project of being low cost, long approved, good quality coal. So the opportunity came up and it made sense and aligned with our strategy.
Daniel Roden, Analyst, Jefferies: Okay. Thank you very much and I'll hand it over. Thank you. No problem.
Call Operator: Thank you. Your next question comes from Tom Sartor with Morgan Financial. Please go ahead.
Tom Sartor, Analyst, Morgan Financial: Good day, Rob and team. Thanks for the call and also for the extra detail coming through now. That's really helpful. Just looking at underlying EBITDA for the quarter, can you perhaps walk us through the adjustments relating to the timing of the Japanese reference price settlements and tonnages?
Rebecca Rinaldi, CFO, New Hope Group: Yes, sure, Tom. I can touch on that for you. We were aware this Japanese settlement price was coming up. So, most of the revenue adjustment was recognized in FY 'twenty four. Only a small portion was impacting through this number you see of $517,000,000 for the half.
So, you shouldn't see anything else impacting that EBITDA line. That Japanese reference price as discussed in the quarterly has come off now and there's a different pricing methodology behind those tonnes.
Tom Sartor, Analyst, Morgan Financial: No worries. And your exposure to that, you've mentioned that it's very minimal now. Is that can we go to a pure linked sort of benchmark for both high energy and low energy products now going forward? Is that the right way to think about it?
Rob Bishop, Chief Executive Officer, New Hope Group: Yes. I mean, we do have some fixed price within the business still, but the JRP impact has reduced significantly. There is a small portion still and we do have some domestic sales, which are not aligned to index based on an annual fixed price.
Tom Sartor, Analyst, Morgan Financial: Yes. That's helpful. And we've got a brief history of price realizations relative to index that you're disclosing now. Should we work from those sort of relativities going forward? Or do you want to talk to an average kind of price realization per asset at a steady state sales mix?
Rob Bishop, Chief Executive Officer, New Hope Group: I don't think it we don't expect it to change too much. Obviously, Accolent's in ramp up at the moment. And given we're mining two pits at the moment instead of the three probably once we're mining three, we should see a steady state sort of production profile which is consistent. There is a bit of movement at the moment between high ash and low ash within Auckland in particular just because it's in its infancy for Stage three. But once we get sort of more material tons out and open up Manningvale West, you should see those relativities stay pretty consistent with what we've done previously.
Tom Sartor, Analyst, Morgan Financial: Terrific. Thank you. And while we're on EBITDA still, just how we should think going forward? I assume that number includes earnings on your sort of cash and fixed interest portfolio, which is a handy contributor, but you've got a drag from Bridgeport. And maybe sort of remind us on how we should think about QBH and those sort of minor forces and how they play into these quarterly reported EBITDA numbers?
Rebecca Rinaldi, CFO, New Hope Group: Yes. So I guess Bridgeport did contribute positively to that EBITDA result, just to flag that one. While not hugely material, it is in there, so we're not taking too much of a drag, which is good. In terms of the other assets, the other one is mainly QBH. So QBH, as you know, is, I guess, a long term asset with take or pay contracts in behind it.
So it is a very strong asset and it does, I guess, improve EBITDA overall because of those take or pay contracts underlying. I guess to get a bit of a view, you probably can go back into our full year results FY 'twenty four. You'll see a little bit of detail around that other segment in there and as well as the Queensland coal mining segment. So given Acland was on care and maintenance, you'll get a bit of a look through as to what QBH contributes. And that number, given they are take or pay contract, is pretty consistent year on year.
Tom Sartor, Analyst, Morgan Financial: Terrific. That's helpful. Thanks, Rebecca. And last one, I promise. Just to follow-up on Akerland and that disruption through the Metro network.
Might you have to reconsider your prior sort of multiyear ramp up pace and guidance going forward?
Rob Bishop, Chief Executive Officer, New Hope Group: I think the ramp up we provided is still aligned. I think probably not so much related to the logistics issues with Cross River Rail, but more to the challenge by Oka. If that continued, that may have hampered the ramp up. But at this stage, we're expecting to be at that 5,000,000 tonne run rate consistent through FY 'twenty seven. So I think we'll get close to that run rate by the end of FY 'twenty six.
But FY 'twenty seven is when we really see a whole year at that sort of that production level.
Call Operator: Your next question comes from Rob Steyn with Macquarie. Please go ahead.
Rob Steyn, Analyst, Macquarie: Thanks for the color on the realized pricing adjustments. That's very useful. Just moving to, I guess, strategic matters, there are quite a few met coal mines sort of in sales processes in Queensland. Just wondering with the cash balance and where the portfolio is currently placed, is that something you're looking into? How should we think about capital allocation in that context?
Rob Bishop, Chief Executive Officer, New Hope Group: Yes. No, that makes sense. So as we previously stated, as part of our strategy, the focus is organic growth. So really ensuring we have Acland up and running and we're at the pointy end of almost we pretty much finished the growth project at Bengala. So that's the initial focus for or the primary focus for our capital allocation.
We as also previously stated, we do look at assets when they come on the market. We are keen to grow through M and A as well, but we do remain disciplined. And really assets have got to tick those boxes which form our strategy, which is ultimately low production cost, good quality coal. It's got to be cash generative, so not greenfield and long life. So we put our lens over assets when they come on the market.
And over the last few years, Malabar is probably really the only one which peaked our interest, but we will be looking at these Queensland assets when they come on the market and deciding whether they fit that strategy.
Call Operator: Thank you. Your next question is a written question who asks, we would like to hear what the management will be able to share with us regarding future dividend payout ratio.
Rob Bishop, Chief Executive Officer, New Hope Group: Future dividend payout, sorry, ratio. So our general guidance for dividend payout is 50% of NPAT, just as a guidance. So that's really what the market should be looking at. And then we also weigh up what our capital requirements are for sustaining capital over the short to medium term as well. So that's really the focus.
Call Operator: Thank you. Your next question asks, now that the Land Court process is behind you, how quickly can you get into the third pit at New Ackland and get to the five MT steady state production level?
Rob Bishop, Chief Executive Officer, New Hope Group: Sure. So with regards to Manningvale West, so we're actively progressing that now. So really that requires some civil works to move roads primarily. So we're working with the local council on that. And at this stage, we're hoping to be in there in first half of calendar year twenty twenty six.
I've already touched on when we expect to get to the 5,000,000 tons, but just to reiterate, that will be in the FY 'twenty seven.
Call Operator: Thank you. Your next question asks, you specified that the Bengali's FOB cash cost is excluding royalties and trade coal. Do you purchase third party coal?
Rob Bishop, Chief Executive Officer, New Hope Group: Generally, we don't. The only and we in some instances, we choose to purchase coal and that's really to fulfill shipments. And in some cases try to remove any demurrage costs if there's any shipping issues. So as a rule, we don't, but we make a judgment call depending on coal availability and aligning that with our contracted shipments.
Call Operator: Thank you. Your next question asks, the Bengala FOB cash cost for the first half was $68 per tonne, which is below your guidance expectations. Do you think the Bengala could finish up on the year below the full year guidance range?
Rob Bishop, Chief Executive Officer, New Hope Group: We had a very positive first half, I think it's fair to say. Definitely the first quarter, we had high stockpiles coming into the year and that certainly benefited our, I guess, the denominator of the unit cost metrics. So solid start to the year, but we do expect consistent production through the second half, which at this stage is to remain within guidance. So still a very good result, but obviously a very strong result to start the year with those high stockpiles coming in and keeping a very elevated sales level.
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