New Hope Corporation Limited

Good morning, everyone. Thank you for joining us today for today's presentation. I'm Rob Bishop, Chief Executive Officer of the New Hope Group. I'm joined by Rebecca Rinaldi, our CFO, and Dominic O'Brien, Executive General Manager and Company Secretary. Before we begin, I would like to touch upon the escalating conflict in Iran and across the Middle East. The loss of civilian life and the scale of displacement are deeply distressing. The conflict has heightened concerns around global energy security, contributing to increased volatility across the energy markets, including upward pressure on coal price. The company is closely monitoring the situation and assessing how these developments may impact our operations, markets and broader business outlook, ensuring we respond in a measured and responsible manner. Further updates will be provided in future reporting. This morning, we released our half-year results for the 2026 financial year. Hopefully, you've had a chance to go through the presentation, but in any case, I'll step you through our key highlights before we open up the lines for the Q&A session. Over the last six months, we have seen an unfavourable movement in our 12-month moving average TRIFA, which has increased from 3.22 to 3.8. The safety of our people remains our highest priority, and we are implementing targeted measures to address this trend. Despite a period of recovery at Bengala Mine, the group maintained saleable coal production volumes compared to the previous period, thanks to the continued ramp up of operations at New Ackland Mine. The group delivered run of mine coal production of 7.9 million tonnes, saleable coal production of 5.5 million tonnes and coal sales of 5.6 million tonnes. In terms of our financial highlights, we delivered an underlying EBITDA of $215 million and a statutory net profit after tax of $54 million, both of which were impacted by lower coal pricing compared to the previous period. Despite softer coal prices and certain short-term operational challenges, our assets remain resilient and continue to generate solid margins, which allow us to maintain returns to shareholders. On that note, I'm pleased to announce the board has declared a fully franked interim dividend of 10 cents per share. As I mentioned earlier, we have seen unfavourable movement in our TRIFA and a slight improvement in our all injury frequency rate over the last six months. We are fully focused on ensuring our people operate in an environment where they are unharmed. We have several safety initiatives in place to revise this trend and restore the improvement trajectory that we have been experienced more generally over the last 18 months. During the period, increased prime waste volumes were delivered at Bengala Mine, which supported the realignment of the pit sequence following significant weather events across the Hunter region late in FY25. The re-establishment of the Bengala mine's pre-stripping activities resulted in lower wrong coal production and ultimately saleable coal production compared to the previous period. At New Ackland mine, the ramp-up continues to progress, with the assets delivering healthy increases in both wrong coal production and saleable coal production. Despite low volumes at Bengala, the group was able to maintain saleable coal production volumes at a consolidated level, reflecting New Ackland mine's increased contribution to the group. During the period, the thermal coal market was impacted by economic uncertainty, oversupply and weakened demand, which resulted in lower coal prices. The group's average sale price, including hedging, was $139 per tonne, approximately 20% lower than the previous period, which impacted both underlying EBITDA and cash flows from operations. Despite lower coal prices, the group's low-cost assets delivered a solid margin of $41 per tonne. Our business generated $185 million in cash flows from operating activities, which enabled reinvestment in our assets and allowed continued return to shareholders. During the period, we returned $124 million to our shareholders, representing the fully franked FY25 final dividend of $0.15 per share. Regardless of pricing dynamics, our portfolio of low-cost assets provides resilience in a cyclical environment and assists to ensure that we continue to generate margins. In a period where the coal price has remained subdued, we were able to generate margins of approximately 30%. This showcases our low-cost nature, as well as the significant upside potential available to New Hope and ultimately our shareholders in higher coal pricing environments. Our approach to capital management is underpinned by a disciplined focus on delivering sustainable returns to our shareholders. The group's strong cash generation allows us to sustain our current baseline of production whilst also investing in our organic growth profile. Our two forms of capital returns are fully frank dividends and on-market share buybacks. The pace of the share buyback has slowed in recent times. Following increases in company share price, however, it remains on foot to provide us with optionality. As previously mentioned, our board has declared a fully franked interim dividend of 10 cents per share. New Hope has had a significant franking account balance and will continue to utilise this value for our shareholders. The dividend reinvestment plan, which we announced in September last year, will be in operation for the interim dividend. Looking ahead, the outlook for our business remains positive. In the short term, Bengala Mine is expected to return to its 13.4 million tonne per annum ROM coal target in the second half of FY26. In addition, New Ackland Mine will continue its ramp up, including the commencement of mining activities in the Manningvale West Pit, scheduled for the final quarter of calendar year 2026. We remain confident in achieving our full year physicals and cash cost guidance for FY26, all of which are tracking strongly. In the medium to long term, we are focused on remaining a resilient, low-cost coal producer while executing our organic growth plans, which will enable us to continue to deliver shareholder value. Thank you very much. I'll now hand over to the operator to start the Q&A session.

Thank you. If you wish to ask a question via the phones, you will need to press the star key followed by the number one on your telephone keypad. If you wish to cancel your request, please press star two. And if you're on a speakerphone, please pick up the handset to ask a question. And if you do wish to ask a question via the webcast, please type it into the Ask a Question box. Your first phone question comes from Rob Stein from Macquarie. Please go ahead.

Rob, and team, thank you for the opportunity to ask a question this morning. Just two questions on the Iranian conflict. Diesel inputs into your operations, I'd imagine, are pretty significant. Can you give us a feel for, one, the cost sensitivity that you might experience, and two, just how secure your safety stock is of fuel at this current point in time?