New Hope (ASX:NHC) executives said the company delivered a “solid quarter” operationally in the second quarter of fiscal 2026, while flagging weaker safety performance and a sharp decline in first-half earnings tied to lower benchmark coal prices.
Chief Executive Officer Rob Bishop, joined by CFO Rebecca Rinaldi and Executive General Manager and Company Secretary Dom O’Brien, walked analysts through second-quarter and first-half results and provided updates on guidance, capital spending at Bengalla, the Bowen Coking Coal settlement, funding considerations for convertible notes, and the ramp-up at Malabar.
Quarterly operating performance and safety
On production, New Hope reported:
- Group run-of-mine coal production of 4.1 million tonnes, up 5% from the prior quarter.
- Saleable coal production of 2.8 million tonnes, up 3% quarter-over-quarter, driven by increased focus on coal mining at New Acland and partly offset by lower Bengalla output due to a seven-day preparation plant shutdown in December.
- Group coal sales of 2.9 million tonnes, up 8% from the prior quarter, which management attributed to improved logistics across the group.
Underlying EBITDA for the quarter was AUD 107 million, in line with the previous quarter. The company’s average realized coal price was AUD 139 per tonne, slightly higher than the prior quarter, which Bishop said reflected improvement in both GC NUC and API 5 pricing.
First-half results: higher stripping, lower realized prices
For the first half of fiscal 2026, prime waste movement was 34.7 million bank cubic meters (BCMs), up 13% compared to the first half of fiscal 2025. Bishop said the increase reflected the continued ramp-up at New Acland and a realignment of Bengalla’s pit sequence following a significant weather event in the last quarter of fiscal 2025.
First-half group run-of-mine coal production totaled 7.9 million tonnes, down 4% year-over-year, which management said was due to Bengalla’s focus on pre-stripping, partially offset by a lower strip ratio at New Acland. Saleable production was 5.5 million tonnes and coal sales were 5.6 million tonnes, both slightly higher than the prior-year period.
Underlying EBITDA for the first half was AUD 215 million, down 59% from the prior-year half. Bishop attributed the decline to lower realized prices, with the group’s realized price dropping to $138 per tonne from $173 per tonne as benchmark coal prices fell.
As of Jan. 31, 2026, New Hope reported available cash of AUD 616 million.
Guidance outlook and Bengalla capital adjustments
Management said it remains confident in achieving full-year physical and cash cost guidance. Bishop said New Acland has performed above expectations and is expected to finish toward the higher end of its guidance range for coal volumes. He added that Bengalla is expected to return to a 13.4 million tonne per annum run-of-mine production rate in the second half of fiscal 2026.
In response to questions on why Bengalla’s sustaining capital guidance was reduced, Bishop said the change was “twofold,” including timing impacts from approval-related delays that would push some spending into fiscal 2027, as well as a program to optimize the capital profile in response to “soft coal conditions.”
Asked about costs at Bengalla, Bishop emphasized that unit costs are volume-driven. He said the mine’s challenging start to the year and higher strip ratio had increased costs versus the prior year, but that costs should improve as strip ratio comes down and volumes rise toward the 13.4 million tonne run rate. He also cited broader industry cost pressures such as labor and fuel, noting these factors are outside the company’s control.
Logistics, forward sales, and coal market commentary
On New Acland logistics, Bishop said the company had earlier concerns but credited logistics providers for stepping up support. He said scheduled rail outages remain in place but are accounted for in planning, contrasting them with prior issues from unscheduled outages. He said the company remains confident in reaching the higher end of guidance at New Acland.
On marketing and pricing, management said New Hope had sold roughly three months of coal forward, with contracts linked to both high-ash and low-ash indices. Executives also noted the group has foreign exchange hedging in place, with hedge levels described as below the “70-cent mark.”
Bishop said New Acland product quality has been affected by timing during ramp-up, with the first quarter skewed toward high-ash coal and the second quarter more toward low-ash. Over time, he said the mix is expected to normalize to roughly a 60/40 split between low-ash and high-ash coal, with low-ash the majority. He also said the company is currently mining two pits and is targeting entry into the “Moneybar West” pit late in calendar 2026 to support blending.
On the recent lift in the GC NUC 6,000 price, Bishop cited multiple factors, including constraints on Indonesian production affecting the high-ash market into China and some influence from volumes of semi-soft coal. He said the company views pricing around the $110 to $120 range as “probably sustainable,” and did not see a major catalyst for a sharp move higher or a dramatic fall.
Bowen settlement, funding considerations, and Malabar update
On Bowen Coking Coal, Bishop said the company achieved a “good outcome” following the counterparty’s administration. He said New Hope would be “fully off risk” for a bond of AUD 45 million and expects to receive a settlement payment of about AUD 12 million for outstanding and future royalty obligations under the original transaction agreement. Management said there are still creditor and approval steps to complete, but they expect the process to be finalized in roughly the next two months. Rinaldi added that accounting impacts would appear in the half-year results to be released in March, including reversals of previously recognized bad-debt provisions. Bishop said the settlement would represent a “clean exit” from the asset.
Executives also discussed convertible notes, pointing to a potential “put risk” in about 18 months depending on share price conditions. Bishop said the company is considering multiple financing methods, including hybrids and convertible structures, and expects market pricing would need to be competitive with the existing 4.25% coupon. He said the company does not need to rush but wants to be ahead of the potential put date.
On capital returns, Bishop said the company had executed about 10 million under its buyback but that, at current share price levels, its focus is “more aligned with dividends,” alongside sustaining and growth capital to support asset viability.
Finally, Bishop provided an update on Malabar, saying the project is on track to hit first longwall coal toward the back end of the current quarter. He said the board-and-pillar operation is improving productivity and that development work and longwall installation were near-term priorities. Bishop characterized surface infrastructure progress positively, noting the overland conveyor is commissioned and “teething issues” on the longwall have been addressed through training and preparation. On distributions, he said returns to New Hope from Malabar are still “a little time away” and would depend on reaching positive cash generation and ultimately paying down debt before dividends can be considered.
About New Hope (ASX:NHC)
New Hope Corporation Limited explores for, develops, produces, and processes coal, and oil and gas properties. It operates through three segments: Coal Mining in Queensland, Coal Mining in New South Wales, and Other. The company holds interests in two open cut coal mines that produces thermal coal, which include the New Acland project located in Oakey, Queensland; and the Bengalla mine situated in the Hunter Valley region of New South Wales. It also holds 849 square kilometers of net oil-producing acreage in nine production projects located in the Cooper-Eromanga Basin.
