Monster dividend from New Hope despite FY26 net profit falling 63%
New Hope's net profit tumbled 63% but management still pushed through with a massive 30 cent fully franked dividend.
Source: iStock
Mentioned
New Hope (NHC) beat the top of its own production and sales guidance in FY26, but net profit fell 63.4% to $161 million amid weaker realised coal prices, higher costs and a step-up in depreciation. Encouragingly, the Board declared a 30 cent fully franked final dividend, more than double what Bell Potter was expecting.
The stock is up 3.3% in early trade to $6.49, its highest since January 2023. At that price the final dividend alone yields around 4.6%.
Why it matters: It's a big dividend surprise, more than double Bell Potter's 14 cent forecast (which had already been lifted from 10 cents after the July quarterly). Underlying EBITDA came in line with the same broker's estimate, so the earnings line held few surprises.
By the numbers (vs. Bell Potter ests):
Coal sales up 11.8% to 11.8mt vs. 10.2-11.5mt company guidance
Revenue down 0.5% to $1,767m vs. $1,758m est (in line)
Underlying EBITDA down 32.8% to $514.3m vs. $514m est (in line)
NPAT down 63.4% to $161.0m vs. $183m est (12% below)
Final dividend 30.0 cps fully franked vs. 14.0 cps est (114% above)
FY26 dividends up 17.6% to 40.0 cps vs. 24.0 cps est (67% above)
Available cash up 10.1% to $778.5m
No FY27 guidance provided
What they're saying: The board said higher coal production and cost control allowed the declaration, and chief executive Rob Bishop framed it as rewarding shareholders for the year's operating performance.
The valuation: Bell Potter was Hold rated on 17 August with a $5.00 twelve-month target. It named logistics as the main medium-term risk, with Cross River Rail constraints and Queensland Rail industrial action hitting sales in the July quarter.
Yes, but: New Hope still declared 40 cents a share for a year in which it earned 19.1 cents, so roughly half the payout comes from cash built up in earlier years.
The backdrop: Thermal coal is trading near a three-month high at US$146.75 a tonne in mid-September, up 13.3% over the past month and 45.7% on a year ago, on stronger global demand and tighter supply. New Hope shares are up 14% over the month and 58% for the year to date.
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New Hope 1-year price chart (Source: Market Index)
What's next: The dividend goes ex on 21 September and is paid on 15 October. New Hope gave no FY27 guidance, which Bell Potter expects with the first quarter production report in November.
