South32 Limited

Good morning, everyone, and thanks for joining us today. On the call with me is our Chief Financial Officer, Sandy Silvano, and Chief Operating Officers, Vanessa Torres and Noah Paley. I'll give a short summary of our financial results and outlook for the first half of FY25 before taking questions. Firstly, I'd like to talk about safety. In September, we tragically lost our colleague, Jose Luis Perez, who was fatally injured in an incident at Cerro Matosa. An investigation into the incident was completed during December. Key learnings have been shared across our organisation and improvement actions are underway to prevent a similar incident happening again. We continue to implement our global safety improvement program and we're determined to achieve a step change in our safety performance. This includes a significant investment in safety leadership through our Lead Safely Every Day program. While we have more work to do, this program has supported measurable improvement in our safety performance. We've had a strong start to the year off the back of our improved operating performance. To call out some of the highlights from the half, we increased aluminium production by 5%, copper equivalent production increased by 21% at Cerro Gorda, and we maintained production guidance across our operations, except for Moselle aluminium, where we have updated guidance as we continue to mitigate the impacts of civil unrest in Mozambique. As announced yesterday, we have now received primary state and federal environmental approvals to the Worsley Mine Development Project. The project will enable access to new bauxite mining areas that are expected to sustain production to at least FY36. At GEMCO, we have commenced a phased restart of mining activities and export sales are expected to progressively increase over the June 2025 quarter, subject to further potential impacts from the wet season. Across the group, we remain focused on driving cost performance, with lower operating unit costs than the majority of our guided operations expected in the second half of FY25. In terms of financial performance, we delivered a 44% increase in underlying EBITDA $1 billion and an increase in underlying earnings to $375 million. Cash flow from operations improved by $361 million, despite a build in working capital due to higher commodity prices and the timing of shipments. And we reduced net debt by $715 million to $47 million, consistent with our focus on prioritising a strong balance sheet through the cycle. As a result of our strong financial position, today we announced a fully frank interim ordinary dividend of $154 million at 3.4 US cents per share and the continuation of our capital management program with $171 million remaining to be returned to shareholders. Turning to our portfolio, the sale of Illawarra Metallurgical Coal in August 2024 for up to US $1.65 billion unlocked significant value and streamlined our portfolio. Building on our previous portfolio improvements, that's also simplified our business, lowered sustaining capital intensity, and strengthened our balance sheet. We are investing to grow our future production of critical minerals as we construct our large-scale long-life Taylor zinc-led silver project at Hermosa in Arizona, progress the exploration decline of the Clark battery-grade manganese deposit, and continue exploration programs as we unlock value across the MOSA's highly prospective regional land package, with recent drilling at the peak deposit returning further high-grade copper results. In closing, our operations are performing well, our balance sheet is strong, and an unwind of working capital is expected to add cash generation in H2FI25. We have an established growth pipeline that can underpin significant growth in zinc and copper. And our unchanged capital management framework is designed to reward shareholders as our financial performance improves. Thank you. I'll now hand back to the operator.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. And if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Paul Young from Goldman Sachs. Please go ahead.

Good morning, Graeme. It's Andy. Hope you're well. Great to have a positive update on most of the assets. And, Graeme, good to see the unit costs are falling in the second half. Just on unit costs and maybe just focusing in on Worsley, first of all, I know this is short-term, but just the second-half cost guidance, it does seem conservative considering that that FX is falling and production theory should actually increase in the second half. So just some commentary around why unit costs will be flat half and half and obviously I know that cost of consumption and prices are a little bit elevated. And then on the medium term cost guidance, so thanks for providing that. What I have seen is that I haven't seen an update on FY26 Production Guide is considering heading into that higher-grade area, so you can maybe just comment on production in FY26. Thanks.