An Effervescent Thermal Coal Price Yields a Promising Fiscal 2022 Outlook For New Hope

With realised coal prices modestly outstripping our expectations in New Hope’s final quarter of fiscal 2021, New Hope’s full-year fiscal 2021 result announcement eclipsed our forecast by 6%. The late fiscal 2021 rally in thermal coal price saw full-year fiscal 2021 EBITDA rise 26% year on year to AUD 372 million. Full-year washed coal sales of 10.1 million tonnes broadly tracked New Hope’s prior guidance as production at Bengalla rebounded strongly in late fiscal 2021 following completion of the mid-life shutdown and maintenance of the mine’s dragline. With the recent effervescence of the thermal coal price expected to persist near-term, the outlook for fiscal 2022 is rosy. Nonetheless, with our midcycle thermal coal price assumption of USD 69 per tonne unchanged, we retain our AUD 2.70 per share fair value estimate for the no-moat stock. New Hope shares screen as undervalued, trading at a 28% discount to our valuation. New Hope will deliver its fiscal 2021 result in full in late September 2021.