Nickel Industries Limited

Hello and welcome to the Nickel Industries Limited 2026 Half Year Results Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, just simply press star 1 again. We'll now turn the conference over to Justin Werner, Managing Director. Please go ahead.

Thank you, everyone, and welcome to the half-year results presentation. I forgot to just ask the moderator to move to the next slide, please. Start with safety and ESG. Zero 12-month LTIFR, 0.45 12-month TRIFR, so these are world-class safety figures. 18 million safe man-hours worked over the past 12 months. In terms of ESG, Once again, we were awarded the Green Popper rating from the Indonesian Ministry of Environment and Forestry, one of only three nickel mining companies to achieve that rating. We entered into an agreement to look at feasibility of natural hydrogen in and around the Hangia mining lease, which could opt for potentially low-cost clean energy source in the future. We inaugurated a 197 hectare biodiversity conservation area a short distance from the Hengjia mine and again one of very few mines who have successfully been able to inaugurate a biodiversity area. The scholarship program continues to progress very well. We now have 30 students actively enrolled in a number of disciplines. And then finally on the CSR side we received TSR awards for excellence in community development and we also won awards for some of our RKEF operations at the HR Asia Awards. If we could just move to the next slide, half year summary, very solid results from the existing business prior to any contribution from commissioning of the E&C project. If we could just move to the next slide please. Group operations and corporate highlights, US$247.6 million of adjusted EBITDA, up 46% from the same time last year. We also announced the $1.3 billion San Paolo valuation in return for a share swap. Sorry, if you could go back. In return for a share swap in the C&E HPAL, which I'll talk about a little bit later on. We also announced the... billion wet metric tonne resource at our Sandpiler project. So that is a world-class resource. And our mine operations, adjusted EBITDA view of 73.4, up 4% on the same period last year. Although, and I'll talk about this a little bit later on, expect to see a significantly increased EBITDA from the mine off the back of a change in HPM pricing. 5.9 metric tonnes of all sales, so it's on track, same as last year, but we are ramping up towards the back end of this year with ENC commissioning, and I'll talk about that a little bit later. Ebitda per tonne margins from the mine were $12.40, and that was also up 5%. Where we see the majority of the improvement in this half was really from our NPI business. adjusted at $146.7 million, up 87%. In terms of nickel sales, they were down slightly. That was in relation to sub-plant maintenance that was undertaken at ANI and ONI, which are really our two major MPI producers. And these results were really driven by strengthening the MPI price, which is $13,784 per tonne for the half, which is up 21% on the same time last year. And then finally, HKL performed very well the first half of this year. Adjusted EBITDA from our 10% interest in HNC was US$35.2 million, up 31% from the same time the previous year. And we were pleased to announce our maiden dividend distribution of US$3.5 million. And then moving to EMC, Tremendous milestone of first NHP production in July, followed not too shortly afterwards by first cohort in August. And we can just move to the next slide, looking at the P&L and adjusted EBITDA. The real drivers of that significant improvement, 46% improvement here but there, was the nickel pig iron price mentioned up 21% to $13,784 and as of today it continues to strengthen past $14,000 a tonne. The LME price has also risen significantly up 15% and averaged $17,700 for the first half of this year. We've been able to, we were able and we were one of a very small number of companies that was able to increase our RKAB quota from 9 million last year to 14.3 million this year. And that will drive some continued improved EBITDA. And then we've seen at the mine more recently, changes in the oil price which are flowing through to very strong margins at the HCM mine and resilient NPI production. So despite the maintenance that I mentioned, we were fairly much similar to the last year. If we could just go to the next slide, please. I'll hand over to Chris just to talk through the balance sheet and the next protocols.

Yeah, thank you, Justin. Morning, everybody. On the balance sheet, the key balance sheet movements between December and June, so 31 December and 30 June, $240 million US was related to the Sphere transaction, so we had a a $239 million receivable as of 31 December and a 240 mil payable to Decent. That's in relation to the 10% interest in BNC that Sphere invested. Those receivables and payables have obviously been received during the period, so that is the main reason for the movement in current liabilities and assets. net debt of $980 million or $982 million at 30 June. Importantly for our covenants, that sits us at about a 2.3 times leverage ratio, which is within our 3.5 times max covenant post our recent refinancing of our bank loans. If the leverage stays at that level at 2.3 times our our margin over SOFA will fall from 3.5% to 2.5% by the end of this year, which effectively reduces our cost of debt from the current 7.1% under the bank loans to 6.1%. Can we move to the next slide, please? We've got our profit and... We'll just set out the profit and adjusted EBITDA reconciliations here on the chart on the left-hand side. You can see the contribution from the three core businesses, the RKF business of 147 mil, the HFL business of 35 mil, and so that's H&C and Syncreation, our trading entity, and 73 mil from Henjaya Mine. 73 mil from Henjaya Mine. The total being there of 255 mil from operations. There's 7.6 mil of NIC overheads. to get us to our final 247 mil of adjusted EBITDA for the first half of 2026. On the right-hand side, we then provide the bridge from adjusted EBITDA to profit, and we can see the key items being obviously the 80 mil DNA, 29 mil in taxes, our net finance costs are just under 50 mil, and then some FX-related... related charges of just under 16 mil to give us our impact for the first half of 2026 of 74 mil. Can we move to the next slide, please? On the cash flow waterfall, the three key items, we've got 65 mil of cash flow. You can see that on the right-hand chart, the first two columns, the 77.5 operating cash flow, less the capex at 12 mil. That's what we say, our cash flow prior to any growth and debt. Our higher earnings were partly, as we've mentioned, so they're partly absorbed by an increase in nickel ore stockpiles of approximately $30 million. That primarily relates to lemon ice as we are preparing for the ongoing commissioning of E&C. Taxes and royalties paid and then a decrease in trade payables of approximately $40 million across the half year. We've had growth spend of $137 million throughout the first half of the year, $46 million of that was for our final E&C payment, for our final 2%, to take us from 44% to 46% equity interest in E&C. Our Sampala development capex of approximately $26 million across the half year, and then an acquisition payment of $28.5 million for Sampala. That was the advance payment that we announced in May of this year. Our net borrowings following the successful syndicated loan in April of refinancing the outstanding $400 million bank loans to $450 million of the syndicated loans in April. They're the key items there. It shows the movement of cash from $323 million at the start of the year to $260 million. So a strong cash balance of $260 million as we head into the second half of 2026. Justin, back to you and PJ.