2018 ANNUAL REPORT 2018 Annual Report a This is an interactive PDF designed to enhance your experience. The best way to view this report is with Adobe Reader. Click on the links on the contents pages or use the home button in the footer to navigate the report. KEY HIGHLIGHTS 5% TOTAL PRODUCTION Saleable coal 9.0Mt 5% TOTAL COAL SALES 8.9Mt NEW HOPE CORPORATION LIMITED % AND CONTROLLED ENTITIES 28% 96 CORPORATE DIRECTORY CONTENTS REVENUE NPAT Before non regular items DIRECTORS FROM OPERATIONS Key Highlights 1 Robert D. Millner Chairman of Directors Todd J. Barlow Non Executive Director $1,079M $253M BUSINESS REVIEW William H. Grant Non Executive Director Chairman’s Review 2 Thomas C. Millner Non Executive Director Operations Overview 4 Sue J. Palmer Non Executive Director 60% Ian M. Williams Non Executive Director Operating and Financial Review 6 EBITDA Operations Review 8 MANAGING DIRECTOR New Hope Group Outlook 15 Shane O. Stephan Sustainability Report 16 COMPANY SECRETARY $453M Tax Contribution Report 30 Janelle S. Moody AUDITORS 40% DIRECTORS’ REPORT 34 Deloitte Touche Tohmatsu Level 23, Riverside Centre, Financial Summary 34 123 Eagle Street, Brisbane QLD 4000 TOTAL Directors’ Report 35 DIVIDENDS PRINCIPAL ADMINISTRATION Auditor’s Independence Declaration 52 & REGISTERED OFFICE 3/22 Magnolia Drive, Brookwater QLD 4300 14 cents FINANCIAL REPORT 53 Telephone: (07) 3418 0500 Facsimile: (07) 3418 0355 Directors’ Declaration 104 Independent Auditor’s Report to the Members SHARE REGISTER Computershare Investor Services Pty Limited of New Hope Corporation Limited 105 117 Victoria Street, West End QLD 4101 Best full year profit before non regular items Telephone: 1300 552 270 in the Company’s 66 year history OTHER INFORMATION 109 www.computershare.com Glossary 109 WEBSITE ADDRESS Chairman’s Review p2. Tenements 111 www.newhopegroup.com.au Shareholder Information 116 ASX CODE: NHC New Hope Corporation Limited and Controlled Entities 2018 Annual Report 1 KEY HIGHLIGHTS 5% TOTAL PRODUCTION Saleable coal 9.0Mt 5% TOTAL COAL SALES 8.9Mt NEW HOPE CORPORATION LIMITED % AND CONTROLLED ENTITIES 28% 96 CORPORATE DIRECTORY CONTENTS REVENUE NPAT Before non regular items DIRECTORS FROM OPERATIONS Key Highlights 1 Robert D. Millner Chairman of Directors Todd J. Barlow Non Executive Director $1,079M $253M BUSINESS REVIEW William H. Grant Non Executive Director Chairman’s Review 2 Thomas C. Millner Non Executive Director Operations Overview 4 Sue J. Palmer Non Executive Director 60% Ian M. Williams Non Executive Director Operating and Financial Review 6 EBITDA Operations Review 8 MANAGING DIRECTOR New Hope Group Outlook 15 Shane O. Stephan Sustainability Report 16 COMPANY SECRETARY $453M Tax Contribution Report 30 Janelle S. Moody AUDITORS 40% DIRECTORS’ REPORT 34 Deloitte Touche Tohmatsu Level 23, Riverside Centre, Financial Summary 34 123 Eagle Street, Brisbane QLD 4000 TOTAL Directors’ Report 35 DIVIDENDS PRINCIPAL ADMINISTRATION Auditor’s Independence Declaration 52 & REGISTERED OFFICE 3/22 Magnolia Drive, Brookwater QLD 4300 14 cents FINANCIAL REPORT 53 Telephone: (07) 3418 0500 Facsimile: (07) 3418 0355 Directors’ Declaration 104 Independent Auditor’s Report to the Members SHARE REGISTER Computershare Investor Services Pty Limited of New Hope Corporation Limited 105 117 Victoria Street, West End QLD 4101 Best full year profit before non regular items Telephone: 1300 552 270 in the Company’s 66 year history OTHER INFORMATION 109 www.computershare.com Glossary 109 WEBSITE ADDRESS Chairman’s Review p2. Tenements 111 www.newhopegroup.com.au Shareholder Information 116 ASX CODE: NHC New Hope Corporation Limited and Controlled Entities 2018 Annual Report 1 BUSINESS REVIEW DIRECTORS’ REPORT with a record 373,875 barrels During May 2018 the Supreme Court of Queensland produced during FY2018. NET PROFIT determined that the previous unfavourable Land This led to a 56% increase AFTER TAX Court recommendation in respect to the NAC03 be in revenue with an EBITDA (BEFORE NON set aside and the matter referred back to the Land contribution of $8 million. REGULAR ITEMS) Court for further consideration. The Company has Chairman’s continued to progress applications for a Mining Lease As a result of the recently (ML), Environmental Authority (EA) amendment and $ FINANCIAL increased charges associated 253M Associated Water Licence (AWL) and provided further REPORT with access to Wiggins Island information to relevant regulatory parties in support Review of these approval processes. The remitted Land Coal Export Terminal, which Court hearing took place in early October 2018. are materially higher than REVENUE FROM previously forecast and Away from the mine site, the Acland Pastoral Company OPERATIONS updates to the JORC reserves, Pty Ltd (Acland Pastoral) continues to mature as a farming the Directors have fully operation taking on another 180ha of rehabilitated impaired the carrying value $ M mined land handed over to pastoral operations from of the Colton exploration 1,079 mining operations. Acland Pastoral has completed OTHER Dear Shareholders, a five year cattle grazing trial on rehabilitated mined INFO project’s assets and recognised An increase in sales tonnages combined with strong coal land that shows cattle on mined land perform an onerous contract provision prices over the past year has enabled your Company as well as, or better, than cattle on unmined land. for the take or pay obligations to return the best full year profit before non regular items Over the forthcoming year your Company will The size and quality of the herd continues to grow associated with that in its 66 year history. These results demonstrate the remain focused on achieving safe production at all with breeder numbers currently at 2,529 head. project. NPAT has reduced strength of the production base built through the well its operations whilst also completing the acquisition EBITDA by $103 million as a result timed acquisition of our current 40% interest in the Bengalla of up to a further 40% interest in the Bengalla Mine. Conclusion mine in addition to the continuing strong performance of of the impairment and New Hope remains committed to securing the approval A strong Balance Sheet and patient investment approach our foundation New Acland and Jeebropilly operations. onerous contract provision. $453M for the New Acland Mine Stage 3 Project (NAC03) following has enabled the Company to lift its production base at the same time as Asian demand for high quality Australian Our continuing growth validates our long term confidence the successful Judicial Review decision of the Queensland Highlights coal continues to grow. Asia is becoming increasingly in the Asian coal markets and demonstrates New Hope’s Supreme Court and in doing so being able to provide driven by a focus on sustainable, reliable and affordable ability to successfully meet our customers’ needs. ongoing employment for the circa 700 jobs reliant Safety continues to be a core Demand is forecast to continue to grow for high quality value across all of our operations with Queensland Bulk energy and the Company is in an advantageous position on the project. to capitalise on the opportunity. thermal coal in Asia and your Company is one of the very Handling Pty Ltd (QBH) at the Port of Brisbane (POB) few independent Australian controlled companies able leading the way, extending its record of being Lost Time I would like to thank my Board colleagues for their to implement a strategy to exploit this growth in demand. Financial Performance Injury Free (LTIF) to six consecutive years. The award efforts and commitment during the year. New Hope has reported a record net profit after tax (NPAT) The coming year will bring with it the end of an era winning Live Well Work Well program at Jeebropilly and and before non regular items of $253 million for the year I would also like to thank the management and staff at Jeebropilly as coal reserves are exhausted. However New Acland has also gained positive recognition taking out ended 31 July 2018, an increase of 96% on the previous of the Company for their hard work in producing when one door closes another opens with the expansion a Queensland Mining Industry Health and Safety Award. an excellent financial and operational result and year. After non regular items the Company reported of investment in Bengalla. Our recently signed binding congratulate them on their success. Finally I would a NPAT of $149.5 million for the year ended 31 July 2018. Jeebropilly was also a finalist in the Queensland commitment with Wesfarmers Limited to purchase like to thank you, the shareholders, for your State Training Awards and a winner of an Australian a further 40% interest in the Bengalla Mine (subject Revenue from operations increased by 28% from the 2017 continued support. to the pre-emptive rights of other Joint Venture parties) Business Award for Innovation due to the ingenuity financial year, totalling $1,079 million. Cash generation for $860m will provide us with majority interest of the maintenance crew who developed a safer truck again remained strong with Earnings Before Interest, in a Tier 1 thermal coal asset. braking system. New Acland also won Australian Tax, Depreciation and Amortisation (EBITDA) before non Business Awards for a new coal sorting process using R D Millner During FY2018, New Hope’s overall production totalled regular items of $453 million up 60% on the previous x-ray technology and for work in communities around CHAIRMAN 9 million tonnes of saleable coal, an increase