New Hope Corp. (NHC), the Australian coal producer holding A$1.1 billion ($980 million) in cash, sees increasing opportunities to acquire mining assets as prices and profits across the industry languish.
“The current state of the market is what New Hope has been waiting for,” Shane Stephan, chief executive officer of Ipswich, Queensland-based New Hope said today by phone. “The lack of profitability in our industry is forcing people to make difficult decisions, and when others are forced to make difficult decisions, you’ve got opportunities.”
Oversupply will keep coal prices weak next year, even as demand remains strong, New Hope said today as it reported a 21 percent drop in full-year profit. The drop in coal prices and a strong Australian dollar also prompted New Hope to cut costs and jobs this year.
Power coal at the port of Newcastle, the Asian benchmark price, dropped for a fourth week to $65.30 a metric ton this month, the lowest since May 2009, according to data from IHS McCloskey.
New Hope shares fell 1.9 percent today to A$2.58 in Sydney trading as of 2:58 p.m. local time, while the benchmark index rose 0.8 percent. The stock has fallen 23 percent this year.
New Hope won’t look at any acquisition opportunities in Mongolia, Africa or Indonesia, Stephan said, declining to identify areas that are of interest to the company.
Just for NHC shareholders (aka long time tortured souls) information.
IRN Price at posting:
28.0¢ Sentiment: None Disclosure: Not Held
NHC Price at posting:
$2.61 Sentiment: Hold Disclosure: Held
