New Hope Corporation Limited

Thank you for standing by and welcome to the New Hope Group FY26 Q4 Quarterly Activities Report and Investor Call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question via the phones, you will need to press the star key followed by the number 1 on your telephone keypad. If you wish to ask a question via the webcast, please enter it into the ask a question box and click submit. I would now like to hand the conference over to Rob Bishop, Chief Executive Officer. Please go ahead.

Good morning, everyone. Thank you for joining our call today. I'm Rob Bishop, Chief Executive Officer of New Hope Group. I'm joined here by Rebecca Rinaldi, our CFO, and Dom O'Brien, our Executive General Manager and Company Secretary. Hopefully you've had a chance to go through the report, but in any case, I'll briefly step you through our key highlights before we open up the lines for Q&A. The July quarter marks the end of the 2026 financial year for the New Hope Group. Operationally, it's been a great year for the group and we are very pleased with our results to date. During the quarter, our TRIFA decreased to 3.89, 12% lower than the previous quarter. However, the high potential event frequency moved up in an unfavourable direction from 1.21 in the previous quarter to 4.65. Critical and fatality and fatal risk management remains a continuing focus for the group. In response to the increase in high potential events and recent serious events across the broader industry, the group has doubled down in terms of focus of the effectiveness of controls for fatal risks. This has included group-wide safety pauses, increased frontline engagement, and targeted review and verification of critical controls. The safety of our people remains our highest priority and we have focused on continuous improvements in all aspects of safety and wellbeing. Bengala Mine recorded a strong finish to the 2026 financial year with the operation performing at the targeted $13.4 million goal production rate for the quarter on a 100% basis. RON coal production was 3 million tonnes, a 16% increase compared to the previous quarter, as the strip ratio moderated following the significant prime overburden removal in the first half of the year. Saleable coal production was 2.3 million tonnes, up 8% from the previous quarter, driven by the increase in RON coal volumes. At New Ackland Mine, the RON coal production totalled 1.7 million tonnes, a 3% increase on the previous quarter, also driven by a reduction in strip ratio, New Ackland Mine achieved coal sales of 0.9 million tonnes, 7% lower than the previous quarter, primarily due to rail cancellations across the network, resulting from Queensland Rail protected industrial action. The group achieved an underlying EBITDA of $169 million, a 30% increase on the previous quarter. The uplift in earnings was driven by improvements in the group's realised pricing, with both favourable movements in benchmark indices and foreign exchange. With the ongoing conflict in the Middle East, volatility in energy markets is expected to continue following supply concerns, which underpin support for thermal coal generation as a reliable energy supply. Turning to our full year results. 2026 marked another great year for New Hope Group as we continue to increase volumes and deliver our organic growth profile. The group achieved saleable coal production of 11.5 million tonnes, an 8% increase on the 2025 year's financial year results. and above the group's guidance range. At New Ackland Mine, we continued to successfully ramp up the operation towards the 5 million tonnes per annum target. For the 2026 financial year, New Ackland Mine produced 3.3 million tonnes of saleable coal, an uplift of 17% compared to the previous year. The operation was able to take advantage of increased spot rail capacity during the year, achieving coal sales of 3.6 million tonnes, which exceeded guidance. Looking forward, access to the Manning Vale respite is scheduled for the second half of the calendar year 2026, which will deliver the next step in the production volumes. Over at Bengala Mine, the 2026 financial year reflected a period of recovery, following significant weather events in the Hunter region late in the 2025 financial year. Despite these impacts, the operation delivered a strong finish and showcased its ability to achieve its targeted raw coal production rate. Bengala Mines delivered saleable coal production and coal sales of 8.2 million tonnes, which exceeded its guidance range. In addition, the operation achieved an FOB cash cost of $81.30 per sales tub, sitting right at the lower end of guidance range of between $81 to $89 per sales tub. Despite a challenging backdrop, the group achieved an underlying EBITDA of $514 million for the 2026 financial year and generated operational cash flows of $564 million. We invite you all to tune in on Tuesday the 15th of September as we release our full year results. We're pleased with our ability to remain a resilient, low-cost producer and we're looking forward to another safe and productive year ahead. I'll now hand over to the operator to start Q&A session. Thank you.

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 ask a question via the webcast, Please type it into the Ask a Question box and click Submit. We'll pause for a moment to allow parties to enter the queue. The first phone question today comes from Glyn Lawcock from Baron Joey. Please go ahead.

Morning, Rob. Just firstly, just the cash flow. Good morning. Cash flow generation exceptionally strong. I guess you finished the year with cash well ahead of everyone's expectations. Was there anything to call out in the quarter?

Nothing more than what we've already stated. I mean, certainly we had a strong, you know, second half to the year and that was continued in the final quarter. But, you know, higher coal prices along with, you know, increased production certainly has given a good outcome. So just to get to the cash level where we're at.

I guess, was there a working capital unwind or anything you can call out? Because, I mean, 200 million cash in the quarter, 800 annualised. I mean, it's pretty impressive. sort of 18% free cash flow yield. So I just wondered if there's working capital that was a one-off?

Yeah, I think there was a lot of reduction in coal stocks. I don't have the figure in front of me, but that could have played a part in it. I don't think there was a significant drawdown on receipts.

I guess one thing, Glenn, just to note on it, during Q3, we did have a number of significant outflows. So I'm sure you've already got the dividends in there, but we also had the cash impact of the conservable bond buyback So there was a few outliers probably in Q3, which then, I guess, accelerated the look of Q4 in terms of cash flow.

Okay, that's cool. And then, Rob, just, I know, I'm trying to get too far ahead, but, you know, you've now got, you know, almost $800 million of available cash. You know, how do you think about how much you want to hang on to of that cash? And, you know, obviously you've got New Ackland, you could maybe share with us how much you've got left to spend there. You know, like, once we get through New Ackland, which I think is another 12 months' worth of expenditure, you know, how are you thinking about what's the right level of cash that can hold on the balance sheet? Thanks.

Yeah, no, good question, Glenn. I think for Ackland, we... We're sort of partway through executing that capital expenditure. I think we gave guidance of around about $130 million required to complete the Manningvale West pit or opening up that pit with the road realignment and fleet required to open up that pit. That's partway through and I think as you would have seen in the quarterly, we should be into first coal beginning of next calendar year. That's really the focus from a capital expenditure. We're rounding off a bit more at Bengala, but following those, capital expenditure should get to more modest levels moving forward, albeit while production's increasing. So cash generation should improve even further than where we've been at, which is a great story. You're quite right. Cash balances are quite high, which is a a good problem to have and certainly we've got a significant breaking account balance. So, you know, we'll be looking to reward shareholders like we always do and have pretty much every year since we've been around. So that will continue. From how much cash we want to hold, certainly we still sort of look at it that we need to probably hold a little bit more than what we would have historically going back sort of five to ten years ago. But fair to say our cash balances at the moment are higher hold on the balance sheet.

Sorry, can I just ask you, in your mind, what was that cash balance five to ten years ago? Your memory is probably better than mine.

When I say that, it's more a case of, you know, it was quite easy to go and source funding being a thermal coal mine. Going back many years and you could argue that you could hold less cash. Our view is although we certainly are finding markets which are opening up to us and we've seen that with convertible bond recently. I guess we don't want to be in a state of stress if we did have a major stoppage at site. Not that we intend to do that but if we were in a situation We wouldn't want to be stressed going to market for cash. You know, the typical, you know, banks that would have been there for us previously are not. So it's prudent for us to ensure that we've got a bit of extra cash on our balance sheet, just from a rate management perspective.

Would that have been 1 to 200 5 to 10 years ago? You're probably thinking... 50% more than that, or just trying to understand what was the previous thinking?

Yeah, it was probably closer to one. You'd also need to take into account the operations which we had operating up until recently were a single asset mine, whereas probably five to ten years ago we had probably three to four operations. So there's a lot of things we need to take into account. We certainly increased our minimum cash view where we just had Bengawa going and Ackland was going into care and maintenance. Obviously, with Ackland ramping up, there's been solid cash flows coming out of that. So the risk is spread a bit more. But certainly, as I said, cash is probably materially higher than what we would see as a minimum cash balance. And we've got a significant franking account balance. So I think it's fair to say there will be a reasonable dividend pay

Alright, that's great. Thanks very much.

No problem. Thank you. The next phone question comes from Daniel Roden from Jefferies. Please go ahead.

G'day guys and congratulations on the results. Thank you. A couple for me. I just wanted to get a bit of colour on, I guess predominantly Bangala, but if I look at used to pressure for the quarter. It's come back down to four and probably just wanted a bit of colour around, I guess, operationally, what you're seeing at the moment. And, you know, is there a forced repressure? Is that kind of more the new precedent that we're expecting into, you know, FY27 and FY28? Or is that just a quarterly short-term kind of recalibration of the risk?

It was certainly a strong quarter. We've previously provided guidance on strip ratio going back I think to last year or last year's full year result I think so you can probably look at that for some more detail but certainly you know at both sides strip ratio is very low and certainly you know looking forward to remain in the fours on average for Bengala for the life of the mine and for Ackland. So we will see some swings in the twin quarters, but certainly, you know, in the range of four is probably a fair estimate. But I'd probably recommend you go back and have a look at that prior presentation where we had that detail relative, and I think we had both Ackland and Bengal were on that slide, relative to industry.

Yep, Mark, thank you. And yields as well, like yields come back a little bit, not with saying it's kind of winded line of normal kind of things, but is that a, you know, I guess the lower yields and increase in saleable, was that like a deliberate response to, you know, I guess what you're seeing in, you know, the spreads between APR5 and Nuke, or is that a, I guess, recovery sequencing into, you know, areas that are a bit, you know, is a marginally lower quality coal relative to prior quarters. Yeah, it's just a little bit of colour around what's going on there.

Yeah, so I mean you've touched on a few points there and it's fair to say that our wash strategy is very much driven by what we're seeing in the market. So we do have the flexibility and particularly since the growth project where we've upgraded the the wash plant, we do have the ability to flex between periods of high discount or low discount between high and low ash coal sales to really maximise the profitability of the mine. So you will see that happen throughout the year. We also are in a mine which is we've got a number of things there which aren't mined for a number of months. So you will see some swings between the high ash and low ash on a quarterly basis and yields as a result. But probably if you sort of look more over an annualised basis, it will be pretty consistent year on year.

Yep, okay. And last one for Minister now, the sustaining capex, you decreased guidance for that mid-year and then you've come in below and on deferral of some of the capital programs. To the extent you can talk about it, how much of that deferral would we be expecting at 527 or is it still a bit of an open question on what's happening in Manugale West and the rail?

Yes, I'll probably... So I think really the focus from a capital perspective and it's something which we, you know, similar to cost, we're very focused on minimizing capex when we can. So that really comes down to good management of overhauls, you know, pushing our assets so that we maximize the productivities but also balancing it up with the risk of, you know, unplanned breakdowns. We put a lot of focus into, you know, really optimising that work in the last year and that's meant that we've been able to push out some, you know, sustaining capital. Some of that is deferral, but some of it is just taking it out and ensuring we're keeping our cash flows or cash outflows to a minimum.

Okay, sounds good. I had a few questions maybe on Malabar, but I might break you and let others ask some questions. So, cheers. Thank you, guys.

Thank you. Once again, to ask a question via the phones, please press star 1 on your telephone and wait for your name to be announced. To register a question via the webcast, please type it into the Ask a Question box and click Submit. Moving to webcast questions, the first webcast question is, Could you please provide an update on the Brisbane Rail Network? You mentioned there was constraints in the quarterly.

Yeah, so unfortunately, rail performance in the fourth quarter was impacted by QR or Queensland Rail Protected Industrial Action. So, you know, this has been well publicised. and there's also the complication of cross-river rail outages. So, you know, we've been working very closely with QR to try and mitigate as much of that impact as possible, but certainly we have seen some constraints and it's resulted in, you know, lower overall paths provided during the quarter.

Thank you. The next webcast question is, safety in the coal industry has been at the forefront of media in recent weeks. What are you doing at New Hope Group to ensure safety at sites?

Yeah, it's a good question. I think probably first of all, you know, just want to acknowledge those affected by recent events. You know, mining is a large industry, but, you know, a small community. So, you know, the events which we've seen probably go back only three or four weeks ago with the two fatalities across the East Seaboard is very tragic. It's also prompted us to really reflect on our own sites consistent with our values. We've held safety pauses across the group and really had a particular focus on listening to the frontline people and understanding what they're seeing and experiencing rather than assuming that we know the answers and we run safety perfectly. It's always a journey for want of a better term. It's always going to be something which we can never keep our eyes off. We've got a strong culture. of sharing across the group, learning, you know, and really challenging ourselves. So our primary focus of safety is to really focus on, you know, risks capable of causing fatal or serious harm. So certainly it's an area of focus for the group and will remain so.

Thank you. Going back to the phone questions, we now have a follow-up from Daniel Roden from Jefferies. Please go ahead.

G'day Ross, long time. I can't remember. Yeah, no, just a few shaky ones if I can. So I was just wondering with the, I guess the 25, I agree it's 26% equity ownership, how you're expecting to adjust that on the books going forward now that it's, you know, it's in this ramp-up period and it's starting to generate a bit of cash?

Yeah, so it's certainly in its ramp-up phase. We were down on site probably about a month or so ago, but down underground to see the long wall operating, which was great to see. So certainly for the team, there's an exciting time and productivities will continue to ramp up from this point onwards. So it should be, you know, get to a point, you know, in the not-too-distant future of being cash generative, which is exciting.

Yeah, Ben. And I guess, you know, you saw Malabar for some time, it's from Mount Arthur, you know, the BNP asset. So then also, you know, to the extent you can talk about it, do you have, I guess, any indication around how that might fit into the, I guess, you know, production and development pipeline, you know, given that New South Wales has a ban on greenfield developments now, that seems like a pretty, you know, good strategic asset to have in that portfolio? Yeah.

Yeah and that's a good point and you know that was a that in itself that transaction was a which was a good outcome you know it provided assistance to BHP but also provided future optionality for Malabar so you just pointed out the you know the stance from New South Wales government I think that really supports you know, the kind of transaction which happens, you know, this would not be regarded as greenfield if, you know, the team at Malabar were to progress any, you know, potential opportunities for further development in those tenements.

Yep, yeah, okay. And I just wanted to ask as well, it's just a bit of a, maybe potentially the field that you've seen, you know, Malabar has been, you know, I guess, semi-publicly doing a bit of a data set to play out at the Mayfields Energy Precinct and Data Centre projects. Do you have a fairly material stake in that? Do you have a view on how that shapes up and what the mechanisms there are and how that gets monetised into the portfolio and I guess, you know, first of all, I guess a deal on that. But, you know, are you looking at any similar opportunities given your payments are, you know, starting to go away as well? And it seems like there's a lot of moves in that area to go and try and monetize data centers and battery developments and everything like that.

Yeah, it's a good question. You know, I think just with regards to New Hope and if you look, I guess, at the Malabar, set up with regards to the land and access to various infrastructure, etc. Bengala is probably in a bit of a different space. It's not something we're actively pursuing at Bengala, but it is certainly a potential opportunity in the future for the Malabar team. It's it's fair to say the number one focus is on the Maxwell mine and ramping that up but there's also some exciting opportunities on the side for want of a better term for the data centers you know battery etc so which you know Wayne and then the team are progressing and then you know some I guess larger decisions will have to be made on those potential investments in the future given their quantum

Perfect. I really appreciate your answers. Thanks.

No worries. Thank you. The next phone questioner is from Christopher Creech from Morgan's Financial. Please go ahead.

Good morning, Rob, Rebecca and Tom. Thanks very much. Thank you. Just a tricky question from me, Rob, just around New Auckland. I mean, you guys had a pretty good year there. And last year in your sort of end of year presentation pack, you sort of put some colour in there around sort of your growth sort of potential for all three of those sort of assets, Bengala, New Athens and Maxwell. And this implies that you're getting to your nameplate capacity at New Athens by sort of, I'd say, 29 onwards. Is that still sort of holding true, or are you sort of thinking that you potentially could get there sort of slightly earlier? Like, how should we sort of do the ramp-up to nameplate for new athletes, if you could be so kind?

Yeah, I think, and it's probably consistent with what I said previously, you know, we're pushing as hard as we can to ramp up that asset, obviously in a safe manner, but, you know, we haven't been holding back for want of a better term. You know, opening up the Manningvale West pit, is key to that. As I said, we'll be, you know, on first call, you know, first quarter calendar year next year. And that'll really sort of open up the mind to get up to that 5 million product. So I think, you know, as far as our target goes, that probably hasn't changed. But certainly, as we've probably seen this year, we're probably a little bit ahead of schedule. So, you know, we're managing the the rail, the short-term rail impacts of, you know, QR, but certainly we'll be pushing as hard as possible to get to that 5 million tonne run rate. Thank you so much. No problem.

Thank you. The next phone question is a follow-up from Glenn Lawcock from Baron Joey. Please go ahead.

Hey Rob, thanks again. Maybe one for Rebecca. Just the Bengala costs jump around a lot. I mean, first half was sort of you know, 84, then you went down to 74, back up to 84.50 in Q4, and the dollar spend was, you know, multiplied by the coal sales, quite low in Q3. Why is the jump, and is it sort of somewhere in the middle as we exit 26, or is the final quarter more indicative of how we should think about Bengala moving forward?

Yeah, I think probably the final quarter is more indicative of Bengala, but, I mean, as Rob touched on, cost control is a key factor focus of ours. We're trying to really, I guess, stay in front of those inflationary impacts which we've seen across the industry over the last six months. Just to touch on the higher unit rate for Q4 though, there were, I guess, less sales than we originally planned. And I think in terms of waste, that first half of the year, we had to move a lot more waste to get the pit back into sequence following the significant weather event back end of 2025. But I think coupled with inflationary impacts, you know, we'll try and really hold tight on the four-year cost. But noting Bengala and you've seen the Fitwin, I mean, it's quite generally pretty consistent. So when sales potentially move out of the plan, that does drive a bit of a variance in the unit cost.

Okay. But the final quarter, it had the diesel in. Is there like a new contract for the workers that kicks in this year?

No, that is next year. Oh, sorry, this year. We're in now. So that's, I think, August, September. That'll be negotiated and finalised.

Okay. And then maybe just a final question, going back to you, Rob. Obviously, the last quarter there's been a couple of sales completed. The Anglo sale, second time round, plus the old Rio minor, which... gone a couple of ways. Is anything out there exciting you or grabbing your attention or is the real focus all just internal at the moment? There's nothing external.

Yeah, I don't think there's anything external which is getting us excited. You know, our focus is and has always been, you know, focusing on the organic growth piece, which we're almost there. But yeah, nothing really out on the market at the moment, which is the right fit for our assets. All right. Thanks again. No worries.

Thank you. That does conclude the question and answer session. I'll hand the conference back to Rob for any closing remarks.

No worries. Thanks very much for your time today all. I appreciate you dialing in and have a great day. Thank you.