ASX 200 drops 0.8%, New Hope (ASX:NHC) reports FY20 result

The ASX 200 (ASX: XJO) is down 0.8% on COVID-19 worries surrounding Europe.

Europe problems

The UK’s chief scientific adviser, Sir Patrick Vallance, has provided a grim prediction that there could be 50,000 new daily cases of COVID-19 by the middle of October without further action, leading to hundreds of deaths per day.

On Monday there was over 4,000 new cases. All pubs, bars, restaurants and other hospitality venues in England must close by 10pm from Thursday. Scotland and Wales also face further restrictions.

There are new rules for European countries like France and Spain with masks being a key part of the defence against the pandemic.

The share market fear is that further lockdowns across Europe would lead to a less economic activity and lower profits. Lower profits means lower business valuations.

Overnight the FTSE 250 Index, a measure of 250 UK shares, fell by around 4%.

The ASX 200 share that is down the most this morning is Virgin Money UK CDI (ASX: VUK) which is down 7.5%.

Some gold miners are also being sold off. The Gold Road Resources Ltd (ASX: GOR) share price is down 4.9% and Northern Star Resources Ltd (ASX: NST) share price is down 4.75%.

The Corporate Travel Management Ltd (ASX: CTD) share price is down over 4%, as is the News Corp (ASX: NWS) share price.

At the opposite end of the ASX 200, the Collins Foods Ltd (ASX: CKF) share price is up more than 4%.

New Hope Corporation Limited (ASX: NHC)

Coal miner New Hope reported its FY20 result today.

New Hope reported that its FY20 revenue fell 17% to $1.08 billion. The coal miner sold 11.5 million tonnes of coal. The increase in production and sales was driven by a full year of ownership of the 80% stake of the Bengalla joint venture.

The coal miner reported profit before tax and non regular items dropped 69% to $119.5 million. Net profit after tax (NPAT) before non regular items also dropped 69% to $83.9 million.

However non regular items for the coal miner amounted to a cost of $240.7 million. That saw the company report a statutory net loss of $156.8 million.

However, New Hope generated operating cash of $298 million before acquisition costs, interest and tax, which was a decrease of 42%.

The New Hope board decided not to declare a final dividend. That means that the full year dividend amounted to 6 cents per share, a 65% reduction.

a number of factors impacted the business over FY20 including lower revenue in US dollars due to market index pricing conditions and increased costs as the Acland Mine nears the end of the stage 2 life.

The non regular items of $240.7 million related to impairment of its coal production and exploration assets, impairment of goodwill, impairment of oil production and exploration assets, New Acland ramp down costs, redundancies and ERP implementation costs.

Management said that Newcastle coal prices were resilient until March but fell around 33%, or A$36 per tonne, from between March 2020 to July 2020 driven by weakening demand and a weakening US dollar. But the company is beginning to see some signs on the supply and demand sides that should help stabilise coal prices.

Other news

The team over at Rask Media have covered the rest of today’s news, so make sure you head over there for more ASX share market coverage.

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