New Hope Earnings: Strong Coal Prices Benefit While Higher Planned Coal Royalties Are Tolerable

New Hope’s fiscal 2023 earnings were strong despite wet weather in the first half dampening volumes from the Bengalla mine. Underlying EBITDA rose 11% to AUD 1.7 billion versus fiscal 2022, with higher thermal coal prices offsetting 14% lower volumes. We maintain our fair value estimate of AUD 6.10 per share for no-moat New Hope. We raise our expectations for near-term future coal prices and expect a faster increase in volumes from Bengalla. However, we expect a slower start for New Acland stage three with environmental court delays lowering our near-term volume forecasts there.