Three results including two from yesterday - from Nufarm and Sigma Healthcare - confirm that the figures are historical and useless for assessing the company’s outlook for the rest of the year and into 2021 in the wake of the impact of COVID-19.
The FY19 result revealed materially softer coal prices in the second half. Delays at Acland continue. The project still requires the mining and water licence to proceed and no further insight was provided.
Back in late 2011 Citi stopped covering New Hope Corp, leaving with a Buy recommendation and $6.10 price target. Circumstances since have obviously changed a lot. Today, Citi re-appears with a Neutral rating and $2.55 price target.
First-half results missed expectations because of costs. Credit Suisse suspects investors are concerned that the syndicated loan the company has acquired is a signal for lower capital returns going forward.
State regulators continue to hold up the approval process for New Hope’s Acland Stage 3 expansion. The broker now assumes a longer period of lower production expectation, and suggests the market will continue to apply a discount for political risk.