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New Hope Corporation (ASX:NHC) has doubled its final Dividend even though its annual profit fell by almost two-thirds. The S&P/ASX 200 coal producer declared a fully franked final dividend of 30 cents a share for the year to 31 July 2026, up from 15 cents a year earlier, while statutory net profit after tax dropped 63.4 per cent to AUD 161mn.

How it managed that comes down to three factors: a Balance Sheet carrying AUD 778.5mn in available cash, record production that lifted sales volumes, and a sharp recovery in thermal coal prices in recent weeks.

What New Hope reported

New Hope released its FY26 results on 15 September 2026. Revenue was broadly flat at AUD 1.767bn, down 0.5 per cent, but underlying EBITDA fell 32.8 per cent to AUD 514.3mn. Net profit after tax slid to AUD 161mn from AUD 439.4mn, and Earnings Per Share fell to 19.1 cents from 52.0 cents.

Lower prices also played a part. New Hope's average realised coal price, including hedging, fell 10 per cent to AUD 145.2 a tonne, while group free-on-board cash costs rose 7.9 per cent to AUD 88.9 a tonne, excluding royalties.

The dividend in detail

Combined with an Interim Dividend of 10 cents, the final payout brings total FY26 Ordinary Dividends to 40 cents a share, compared with 34 cents in FY25. In other words, the final dividend doubled, while the full-year total rose by about 18 per cent.

The size of the final payout surprised the market. Because the final dividend exceeds FY26 earnings per share, it is being funded partly from the cash New Hope has accumulated rather than from the year's profit alone.

The shares traded ex-dividend on 21 September, with payment due on 15 October, according to market reports.

Record production helped

Operationally, it was a higher year. Saleable coal production rose 7.6 per cent to 11.5mn tonnes, above the top of guidance of 10.2mn to 11.5mn tonnes. Coal sales reached 11.8mn tonnes, and run-of-mine production was 16.9mn tonnes.

The Bengalla mine in New South Wales, in which New Hope holds an 80 per cent interest, produced 8.2mn tonnes of saleable coal, up 4.1 per cent. The New Acland mine in Queensland continued to ramp up, lifting saleable output 17.3 per cent to 3.3mn tonnes, while its coal sales rose 37 per cent to 3.6mn tonnes. The company is targeting a rate of about 5mn tonnes a year at New Acland.

New Hope also holds a 25.97 per cent interest in Malabar Resources, which owns the Maxwell underground mine in the Hunter Valley. Its investor presentation showed FY27 saleable production guidance of about 12.7mn tonnes.

Why coal prices matter

The timing helped support management's decision. New Hope's presentation cited the Newcastle benchmark thermal coal price at USAUD 148 a tonne on 11 September 2026, well above the long-run average of about USAUD 83 a tonne but far below the peaks of more than USAUD 450 a tonne reached in 2022.

Balance sheet strength

New Hope's available cash rose to AUD 778.5mn from AUD 707.3mn a year earlier, despite paying AUD 206.3mn in dividends during the year. Free Cash Flow was AUD 371mn, and the Debt-to-Equity Ratio stood at 0.11 times. The company also refinanced AUD 300mn of convertible notes at a coupon of 2.625 per cent.

That position gives the board flexibility.

Risks and context

The dividend increase does not change the fact that earnings fell sharply.