A$161m profit, 11.5Mt production and 2.96Bt resources at New Hope
New Hope delivered more coal, expanded its resource base and declared a 30-cent final dividend, but lower realised prices and higher costs cut FY26 profit by 63.4%. The results leave investors weighing near-term earnings pressure against a larger production pipeline.
- Net profit after tax fell 63.4% to A$161.0 million
- Saleable coal production rose 7.6% to 11.5Mt
- Total coal resources increased to 2.96 billion tonnes
- Fully franked final dividend declared at 30 cents per share
- Bengalla extension remains subject to studies and approvals
Profit falls despite higher coal volumes
New Hope Corporation Limited (ASX:NHC) increased coal production and sales beyond guidance in FY26, yet the earnings line moved sharply in the opposite direction. Net profit after tax fell 63.4% to A$161.0 million, while underlying EBITDA dropped 32.8% to A$514.3 million. Revenue was broadly flat at A$1.77 billion.
The squeeze came from two directions: the average realised sales price, including hedging, fell 10% to A$145.20 a tonne, while underlying FOB cash costs excluding royalties and trade coal rose 7.9% to A$88.90 a tonne. New Hope attributed the cost increase to heavier prime overburden movement during pit re-sequencing at Bengalla, elevated diesel prices and higher depreciation from growth investment at Bengalla and the New Acland ramp-up.
That makes the cash result more resilient than the statutory profit suggests. Operating cash flow was A$564.1 million, little changed from the prior year, and available cash stood at A$778.5 million at 31 July, including A$484.8 million of cash and A$293.7 million in fixed-income investments. The company also refinanced most of its 2029 convertible notes with A$300 million of notes due in 2032 at a 2.625% coupon, reducing the near-term refinancing burden, although the transaction generated a A$20.3 million accounting loss on extinguishment.
Production pipeline continues to build
Saleable coal production rose 7.6% to 11.5 million tonnes and coal sales climbed 11.8% to 11.8 million tonnes, both above the upper end of guidance. Bengalla returned to its 13.4Mtpa ROM production rate in the second half after recovering from earlier weather and logistics disruption, while New Acland’s saleable output increased 17.3% to 3.3 million tonnes.
New Acland remains the nearer-term growth engine. The Manning Vale West road realignment is scheduled to enable access in the final quarter of calendar 2026, supporting the mine’s planned ramp-up towards 5Mtpa. The remaining growth program carries estimated capital expenditure of A$65 million to A$75 million for road works, alongside up to A$60 million for equipment and other infrastructure in the company’s results presentation.
Resources rise, but not all tonnes are investable yet
New Hope’s 2026 JORC update lifted total coal resources to 2.96 billion tonnes from 2.55 billion tonnes. Bengalla contributed an additional 262 million tonnes, including 238 million tonnes of open-cut resources in exploration licences EL9431 and EL9863, while underground resources increased to 100 million tonnes. New Acland resources rose by 151 million tonnes to 636 million tonnes.
The headline resource growth is not the same as booked production capacity. New Hope says further mine planning, economic analysis and pre-feasibility work are required before the Bengalla extension can convert into reserves. At New Acland, 283 million tonnes of recoverable reserves require approvals beyond the currently approved Stage 3 area. Total recoverable reserves increased to 844 million tonnes from 818 million tonnes, while marketable reserves rose to 516 million tonnes from 507 million tonnes.
Dividend holds its ground as earnings retreat
The board declared a fully franked final dividend of 30 cents per share, taking FY26 dividends declared to 40 cents per share including the 10-cent interim payment. The final dividend is scheduled for 15 October 2026, with the Dividend Reinvestment Plan operating without a discount and expected to be satisfied through newly issued shares.
The payout is notable because it sits alongside a much lower profit result and a capital-intensive growth phase. New Hope paid A$210.8 million in dividends during FY26, while capital expenditure on property, plant and equipment fell to A$185.2 million as the Bengalla Growth Project moved beyond its peak spending period. The company said capital expenditure is expected to return to a more sustainable level in coming years, but New Acland’s next stage still requires meaningful funding.
The next test is margin recovery
New Hope enters FY27 with more tonnes in the ground, stronger production from New Acland and a larger stake in Malabar Resources, now 25.97%. Malabar’s Maxwell Underground Mine produced its first longwall coal during the year, but New Hope’s equity-accounted share of Malabar’s result was a A$11.1 million loss, illustrating that some of the growth portfolio remains ahead of its earnings contribution.
The central question is whether volume growth can outrun the pressure from coal prices, strip ratios, diesel, depreciation and approval-linked capital. A larger resource base improves the strategic runway, but the next set of results will need to show that the runway is translating into stronger margins rather than simply more geological optionality.
Bottom Line?
New Hope has bought itself more production optionality, but FY27 will be judged on whether that growth restores margins after the FY26 earnings reset.
Questions in the middle?
- Can New Acland reach its planned 5Mtpa rate without further cost or logistics pressure?
- How much of Bengalla’s new resource base can ultimately become approved, economic reserves?
- Will coal prices and operating costs allow the 30-cent final dividend to remain sustainable?
