New Hope Corporation Limited

Good morning everyone. Thank you for joining us today at our FY25 half year results presentation. I'm joined by Rebecca Minardi on my left, our CFO, and Dominic O'Brien on my right, our Executive General Manager and Company Secretary. Today I'll be stepping you through our key highlights for the first half of the year and then we'll move straight into Q&A session. It's been a strong first half for the 2025 financial year for New Hope. Pleasingly, we've seen an improvement in safety with our 12 month moving average TRIFA decreasing by 18% over the past six months from 4.99 to 4.08. We know we have more work to do, but it's positive to see the performance against those safety metrics improve. Operationally, the group has reported an increase in coal volumes. Rom coal production was 8.3 million tonnes, a 56% increase on the first half of 2024. Saleable coal production was 5.4 million tonnes, up 33%, and coal sales were 5.4 million tonnes, up 44%. This result reflects the continued execution of our organic growth plans, where we are targeting significant production increases. In terms of our financial highlights, we delivered an underlying EBITDA of $517 million, a 22% increase, and a statutory net profit after tax of $340 million, an increase of 35% compared to the first half of 2024. In addition, our business generated $370 million of cash flow from operating activities, which funded investments in our organic growth pipeline and has enabled us to deliver returns to shareholders. On that matter, I'm pleased to announce the board has declared a fully franked interim dividend of 19 cents per ordinary share. In addition, we have also announced the start of an on-market buyback of ordinary shares for up to $100 million, providing further shareholder returns. Turning to safety. The safety of our people is paramount, and we are focused on ensuring our people go home at the end of each day unharmed. As I mentioned earlier, we have seen an improvement in our TRIFA and our all-injury frequency rate since we reported to the market six months ago. Although we still have a long way to go, it is pleasing to see the safety program we put in place in recent months have started to have a positive impact at our sites. Our group operational performance can be summarised in two key points, high coal production and lower unit costs. At our 80% owned and operating and operated Bengala mine in New South Wales, we reported an uplift in saleable coal production to 4.2 million tonnes. with a corresponding decrease in FOB cash costs to $68.30 per sales tonne. With the completion of the Bengala growth project, the mine is now operated at the expected steady state. Due to the combination of some timing delays and our disciplined approach, with consideration to the recent decrease in coal prices, we've revised our Bengala sustaining capital and expenditure guidance with a focus on capital optimisation. Bengala's mine Bengala Mines FY25 sustaining capital guidance has reduced from $200 to $245 million, sorry, from $2 to $245 million to $185 to $225 million. The continued ramp up of our new Ackland mine delivered a significant uplift in coal production, contributing 1.2 million tonnes of saleable coal for the first half. Importantly, the conclusion of Oakey Coal Action Alliance's legal challenge provides certainty for the community and a clear runway to increase production to around 5 million tonnes per annum by developing the Manningvale West mining area. During the half, New Hope increased its equity interest in Malabar Resources Limited from 19.97% to 22.97%. This investment increased our exposure to high-quality metallurgical coal and aligns with our strategy of investing in low-cost coal assets with long-life approvals. Overall, the strong operational performance of both Bengala Mine and New Auckland Mine provides a 33% uplift in saleable coal production to 5.4 million tonnes and a 21% decrease in group FOB cash costs to $77.70 per sales tonne. Turning to our financial highlights, the business generated $317 million in cash flow from operating activities, which was a significant step up compared to the first half of 2024. This result reflects the continued execution of our organic growth plans, but also demonstrates our resilience to coal price fluctuations, which we have detailed on slides nine and 10. Our cash generation supported further investment in our organic growth plans, allowing us to increase our equity interest in Malabar and most importantly, return value to shareholders. During the half, we returned $186 million in dividends to shareholders, representing a 10.3% gross dividend yield for the 12 months to the 31st of January 2025. Here on slide eight, we have outlined our approach to capital management, which ensures we can deliver sustainable and significant returns to shareholders through a range of methods that we actively review. One of these methods is the on-market buyback of ordinary shares of up to $100 million that we announced to the ASX today. The buyback represents an opportunity to enhance the value of the remaining shares on issue, given our view that the current share price undervalues the company. We will apply the same discipline as our previous buyback, with the buyback working in conjunction with dividends. On that note, our board has declared a fully franked interim dividend of 19 cents per ordinary share, which is allied to the strong half-year results. New Hope has a significant franking account balance, and using this account is a key priority. Therefore, dividends will continue to be the predominant form of capital returns to shareholders. Looking ahead to the second half of the financial year, our focus is on the safe production ramp-up at New Ackland and maintaining the increased production levels at Bengala, Our performance in the first half of the year has us on track very well in terms of our guidance ranges. Beyond this financial year, we remain focused on our organic growth profile. This includes the continued ramp up of New Ackland mine to 5 million tonnes per annum operation, the sustained production of Bengala mine and the development of Malabar's Maxwell underground mine, all of which are low unit cost, low risk assets. Our targeted production increases require limited capital expenditure. This will support increased levels of free cash flow, ultimately creating additional value to return to our shareholders. Thank you very much. We'll now open up the lines to Q&A.

Thanks, Rob. One of the first questions to come through does relate to New Ackland. So with the OCRA appeal now resolved, how long will it take for New Ackland to become a 5 million tonne operation.

So I think the conclusion of the OCCA appeal, now we've got through that, we're working through ramping up that pit. So around about FY27, we expect to get to a 5 million tonne per annum run rate.