SOL Washington H Soul Pattinson and Company Limited

New Hope Corp. Ltd. (NHC.AU) boosted underlying earnings in fiscal 2009 but has warned that weaker prices will mean a drop in profit in the current financial year.

Profit excluding exceptional items more than doubled to A$262.3 million in the year ended June 30 from A$90.7 million in the prior year as the miner boosted coal sales and took advantage of record prices.

However, the impact of the global downturn has since seen prices for its thermal coal fall and the company warned its profit will shrink in fiscal 2010.

"With the sharp decrease in export coal prices resulting from the world economic downturn in late 2008 and early 2009, it is likely that an earnings decline will eventuate in 2010 from normal operations, despite higher production and sales," the miner said in a statement.

New Hope produced 5.1 million metric tons of coal in fiscal 2009 and the miner said it expects output in fiscal 2010 to be between five million and six million tons.

The company sells about 22% of its coal on the domestic market and 78% into the more lucrative export market.

New Hope's net profit soared to A$1.95 billion from A$90.7 million in the prior year, driven largely by the sale of coal assets.

It sold the New Saraji coal project to BHP Billiton Ltd. and Mitsubishi Corp. for A$2.45 billion in September 2008. The miner is returning A$600 million of this to shareholders in a special dividend of 72.75 cents per share and will pay another A$725 million to the government in tax.

Chairman Rob Millner said this would leave it with more than A$1 billion in the bank and, while the focus would be on spending on organic growth projects, the company would also be looking for potential acquisitions.

"We are not prepared to mention any companies but obviously we are looking at that," he told reporters.

New Hope exports its coal to a number of Asian buyers including China, which has recently emerged as a significant importer of Australian coals.

Chief Executive Rob Neale said he does not expect Chinese coal imports to continue to rise at the rates recently seen but he believes China will remain a significant buyer of Australian coal.

"I think that the rate of growth will shrink in the next six months but it will still be a seriously good number," he said.

Revenue from ordinary activities for the year climbed to A$700.8 million from A$329.8 million last year and the miner paid a final dividend of 4.5 cents a share, up from 3.5 cents last year.

The profit and dividend payout were in line market expectations.

At 0150 GMT, New Hope shares were up 1.9% at A$5.91 while the benchmark S&P/ASX 200 index was down 0.1% at 4673.1.

New Hope is 61.2% owned by investment group Washington H. Soul Pattinson and Co. Ltd.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com

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