New Hope (FRA:OD8) ROC % : 9.88% (As of Jul. 2024)

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What is New Hope ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. New Hope's annualized return on capital (ROC %) for the quarter that ended in Jul. 2024 was 9.88%.

As of today (2024-12-15), New Hope's WACC % is 6.00%. New Hope's ROC % is 13.87% (calculated using TTM income statement data). New Hope generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.

New Hope ROC % Historical Data

The historical data trend for New Hope's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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New Hope ROC % Chart

New Hope Annual Data

Trend

Jul15

Jul16

Jul17

Jul18

Jul19

Jul20

Jul21

Jul22

Jul23

Jul24

ROC %

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-9.94

-0.70

44.23

37.60

13.78

New Hope Semi-Annual Data
	Jan15	Jul15	Jan16	Jul16	Jan17	Jul17	Jan18	Jul18	Jan19	Jul19	Jan20	Jul20	Jan21	Jul21	Jan22	Jul22	Jan23	Jul23	Jan24	Jul24
ROC %	Get a 7-Day Free Trial															61.97	49.72	26.30	18.31	9.88

New Hope ROC % Calculation

New Hope's annualized Return on Capital (ROC %) for the fiscal year that ended in Jul. 2024 is calculated as:

	ROC % (A: Jul. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2023 )	+	Invested Capital (A: Jul. 2024 ))	/ count )
=	312.25 * ( 1 - 31.75% )	/	( (1475.637	+	1618.287)	/ 2 )
=	213.110625	/	1546.962
=	13.78 %

where

	Invested Capital		(A: Jul. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1977.039	-	58.163	-	( 457.57	-	max(0, 233.258	-	676.497	+	457.57	))
=	1475.637

	Invested Capital		(A: Jul. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	2133.437	-	116.425	-	( 507.146	-	max(0, 378.078	-	776.803	+	507.146	))
=	1618.287

New Hope's annualized Return on Capital (ROC %) for the quarter that ended in Jul. 2024 is calculated as:

	ROC % (Q: Jul. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jan. 2024 )	+	Invested Capital (Q: Jul. 2024 ))	/ count )
=	228.044 * ( 1 - 32.7% )	/	( (1488.976	+	1618.287)	/ 2 )
=	153.473612	/	1553.6315
=	9.88 %

where

	Invested Capital		(Q: Jan. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1860.037	-	75.589	-	( 295.472	-	max(0, 142.158	-	578.367	+	295.472	))
=	1488.976

	Invested Capital		(Q: Jul. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	2133.437	-	116.425	-	( 507.146	-	max(0, 378.078	-	776.803	+	507.146	))
=	1618.287

Note: The Operating Income data used here is two times the semi-annual (Jul. 2024) data.

New Hope (FRA:OD8) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, New Hope's WACC % is 6.00%. New Hope's ROC % is 13.87% (calculated using TTM income statement data). New Hope generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

New Hope ROC % Related Terms

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New Hope Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Other Energy Sources » New Hope Corp Ltd (FRA:OD8) » Definitions » ROC %

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NHPEF:USA OD8:Germany NHC:Australia

Address

175 Eagle Street, Level 18, Brisbane, QLD, AUS, 4000

Website

https://www.newhopegroup.com.au

New Hope Corporation is an Australian thermal coal miner. It has two operating mines: the 100%-owned New Acland coal mine in Queensland and its 80%-owned Bengalla coal mine in New South Wales. The company should sell around 13 million metric tons of thermal coal annually from fiscal 2028, up from around 8.7 million in fiscal 2024, driven by the construction and ramp up of New Acland Stage 3. The vast majority of New Hope's production is sold into seaborne thermal coal export markets. Reserves at New Acland and Bengalla are sufficient to support multidecade mine lives. New Hope also has significant undeveloped coal resources in Queensland, as well as a 20% holding in the Malabar-Maxwell metallurgical coal mine, which began production in 2023.

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