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Highlights:

  • Quarterly EBITDA falls 27% to AU$155.2 million as coal prices decline 7.3%.
  • FY25 production and sales guidance revised downward due to rail performance issues.
  • Share price down 26% over the past year, underperforming the ASX 200 index.

The shares of New Hope Corporation Ltd (ASX: NHC) fell sharply on Monday following the release of the company’s third-quarter results. At the time of writing, the ASX 200-listed mining stock is down 7% to AU$3.66, reflecting investor reaction to a combination of weaker coal prices and reduced full-year guidance.

For the three months ending 30 April 2025, New Hope reported group saleable coal production of 2.8 million tonnes (Mt), consistent with the previous quarter. While production levels held steady, lower average realised coal prices had a direct impact on earnings.

The company’s average realised coal price during the third quarter was $147.50 per tonne, representing a 7.3% decline from the AU$ 159.10 per tonne reported in the second quarter. This drop more than offset a 1.7% reduction in Bengalla Mine cash costs, which came in at $75.30 per sales tonne (excluding state royalties).

As a result, underlying EBITDA fell 27% to AU$155.2 million for the quarter, underscoring the sensitivity of earnings to global thermal coal price movements. Despite the earnings decline, New Hope ended the quarter with a cash balance of AU$ 659.3 million, split between AU$ 287.6 million in cash and cash equivalents and $371.7 million in fixed income investments.

Looking ahead, the company flagged a mixed outlook for thermal coal prices. The economic uncertainty continues to weigh on the market, implies emerging that oversupply is being absorbed. The company indicated that most of its production for the next six months is already committed through forward sales agreements, helping to shield it from short-term volatility in spot pricing.

However, the stock was further pressured by a downgrade to full-year guidance. Operational constraints at the New Acland mine, particularly related to rail capacity and performance, are expected to impact output for the remainder of the financial year.

As a result, FY25 total saleable coal production is now forecast between 10.58Mt and 11.57Mt, revised down from the previous range of 10.83Mt to 11.87Mt. Coal sales expectations have also been lowered to between 10.41Mt and 11.45Mt, from an earlier forecast of 10.66Mt to 11.75Mt.

The third-quarter update and guidance revision mark a challenging period for the company, especially when compared to the broader market. Over the past 12 months, New Hope shares have declined 26%, significantly underperforming the ASX 200 index, which has risen 6.5% in the same period.