Transcription of The Stock Network Interview with New Hope Group (ASX:NHC), Managing Director & CEO Rob Bishop
Lel Smits: New Hope Group is a top 200 ASX listed company and Australian coal producer with operations spanning the Bengala mine in New South Wales and the New Auckland mine in Queensland, alongside associated port and agricultural businesses. The company has delivered another strong operational quarter, increasing production, coal sales and earnings, while maintaining a robust balance sheet to support future growth across its portfolio. Ahead of presenting at the Sydney Mining Club, I’m joined by CEO Rob Bishop to discuss the drivers behind New Hope’s latest performance, its operational strategy and the outlook for its key mining assets.
Rob, welcome to the Stock Network.
Rob Bishop: Thank you for having me.
Lel Smits: Now, New Hope has reported higher production, increased coal sales, lower costs at Bengala and also stronger underlying EBITDA for the latest quarter.
What were the key factors behind this performance and also what are your priorities for the period ahead?
Rob Bishop: Yeah, no, thanks for that. And like I said, thanks for having me. I guess operationally, we had a really good quarter for both Bengala and at our Auckland mine and really pleased with our position as we close out the year.
I guess from a key factors perspective, you know, to underpin this performance, you know, quarter on quarter, Bengala mine, increased coal by circa 14% from a salable coal production perspective, which was really reflective of strong mining conditions and favourable logistics to complement that. During the quarter, you know, Bengala operated at that $13.4 million production, which is what our growth target has been for that asset. And it sort of made up for the challenging first half of the year when we saw some challenging weather and some issues with, I guess, getting stripping back to a normal rate.
So from a cost perspective, FIB cash costs for Bengala, excluding royalties at $74 a tonne Aussie, which is sharp and sort of underpins our position on the cost curve. And, you know, the underlying EBITDA for the quarter was $130 million, which is circa just over 20% increase from the previous quarter. So really, really strong outcome.
And I guess, you know, a big part of that is, you know, the global coal markets at the moment, the conflict in the Middle East, certainly driving an uptick in price, which has been a bit volatile, but we’re seeing that uptick again happening at the moment. So priorities ahead, really the focus is now, you know, continuing what we’re doing at Bengala, but focusing on that safe ramp up of Ackland Mine and we’re moving into the Maningbah West pit as we speak. And as I touched on before, really maintaining our position as, you know, as a low-cost operator through what has been challenging, you know, inflationary, you know, impacts at the moment.
So, and probably the last is really managing our logistics performance at both sites. We have had some challenges there, but certainly lots of interaction with rail providers, both below and above rail, which tough wood is working well.
Lel Smits: And Rob, when it comes to growth across your broader portfolio with established operations at Bengala, also new Ackland, and as well as supporting port infrastructure, New Hope does have a very diversified portfolio.
But really looking ahead, where are you seeing those biggest opportunities to continue growing production, also perhaps improving efficiency, also creating that long-term shareholder value?
Rob Bishop: Yeah, so I guess looking ahead, Outlook is strong for the group and that’s really underpinned by organic growth and that’s, you know, off the back of the growth out of, which we’ve essentially fully executed at Bengala to get to that 13.4 million tonne run rate. And then also at Ackland, really getting that pit ramped up, moving out to the West and getting to that, you know, steady state 5 million tonnes production is key. So I guess as this organic growth is nearing completion, you know, we’ve effectively doubled our production since our 2023 levels.
So now we see, you know, capital coming off to a modest sustaining capital level, but production significantly increased, which ultimately leads to really solid cash flow, which is, you know, there for the taking for our shareholders. So we really get the opportunity to, you know, to reward our shareholders more than probably what we’ve done in the past. And I think that has been our strength previously.
Lel Smits: Rob, thank you for the update from New Hope Group.
Look forward to hearing more at Sydney Mining Club.
Rob Bishop: Perfect. Thanks so much.
Ends