UPDATE: New Hope Corp 1st Half Net Profit A$407.4 Million, Lifted By Arrow Energy Sale

New Hope Corp. (NHC.AU) said Tuesday first-half net profit more than tripled to A$407.4 million from A$111.6 million a year before, buoyed by the coal miner selling its 16.7% stake in Arrow Energy Ltd. to Royal Dutch Shell PLC (RDSB.LN) and PetroChina Co. (PTR).

The miner, which operates two mines in southeast Queensland, said the sale added a one-off A$326.3 million to net profit. Excluding this benefit, net profit in the six months to the end of January fell 27% to A$81.1 million from A$111.6 million, with the company blaming a strong Australian dollar, increased transport costs, and the impact of wet weather in Queensland.

Australia is the world's largest coal exporter, but heavy rains along its eastern coast since last November have severely hit the industry. The country's Bureau of Meteorology earlier Tuesday warned that an area of the country including New Hope's New Oakleigh and New Acland mines west of Brisbane would have a 70% chance of higher-than-median rainfall during the three months to the end of June.

New Hope said it had been particularly hit by problems with QR National Ltd.'s (QRN.AU) Western Rail System, which carries coal from its two mines to the port of Brisbane. The rail system "was severely damaged" from flooding around the time of January's Brisbane floods. Movements of coal from New Acland would be curtailed for around 2.5 months and were expected to resume in late March, but the full impact of the rail outage couldn't yet be accurately determined, New Hope said.

Clean coal production fell 2% on year to 2.8 million metric tons as a result of the rain, particularly in January, New Hope said, predicting full year output of 4.8 million tons-5.2 million tons.

New Hope last year mined 5.9 million tons of coal, making it the fifth-biggest coal miner listed on the Australian Securities Exchange.

In the first half of the year, revenues fell 8.6% to A$336.2 million from A$367.9 million, while the interim dividend was raised 5% to 5.25 cents per share from 5.00 cents.

In an outlook statement, the miner said expectations for thermal coal prices were firm heading into negotiations on annual benchmark coal prices expected to begin in coming weeks.

Negotiations over the annual benchmark price for thermal coal are expected to begin between Xstrata PLC (XTA.LN), the world's largest producer of the export commodity, and representatives of Japanese power generators in coming weeks.

Progress toward the talks has been interrupted by Japan's earthquake, which analysts expect to crimp coal demand in the near term but to increase it over the longer term as coal generators take up the slack from the country's stricken nuclear industry.

Thermal coal at Newcastle port in Australia's New South Wales, the world's biggest thermal coal port, rose to US$122.60 a ton for April deliveries Monday. The price fell sharply Friday after hovering close to US$130 since late February.

-By David Fickling, Dow Jones Newswires; [phone]; [e-mail]